Can buying an air-conditioner to study for one’s career be seen as part of a job hunting activity? Should the government allow one to spend the social subsidies on dental care services or games? Such examples are what exactly happened after the youth job-searching monetary aid was employed at the beginning of this year. The very policy provides job-seekers in the ages of 18 to 34 with a monthly subsidiary of 500,000 won. It is aimed to alleviate the financial burdens on the youngsters seeking for jobs that are suffering in poverty-but with the controversy broiling for its inefficiency, the road to achieving a social consensus does not seem smooth.
The government is actively promoting the social welfare system for the rising generation. In 2016, Cheongnyeon Sudang was introduced as a social provision to support the applicants find a job. Such measures are to tackle the unemployment issue of youngsters. According to Statistics Korea, youth unemployment rate remained at nine percent, which is the highest record after the economic crisis in the 1990s. Due to the insecure labor market, over a million youths in their twenties are undergoing a long-term unemployment period, suffering in the shortage of money. Thus, the officials have instilled funds to ease the economic hardships and foster a stable business climate for youths to find positions.
Nevertheless, several criticisms have been leveled against the effectiveness of the current policy. Opponents claim that it gives room for fraudsters to use the budget in pursuing personal profits, such as the air conditioner buying instance mentioned above. Some even argue that this method is a form of populism strategy to earn political favor from the young generation. With negative responses from the general public, it is uncertain whether which option will deliver the most benefits to society maintaining the policy, or not. Therefore, a constant discussion over the relevant policy is needed to reach an agreement with the dissenters.
Lack of Vocational Education
Critics point out that raising a fund is not enough to solve the unemployment issue in the long-term. Since the very system offers the recipients with funds in cash for six months, it may help the youth in the short run to pay off the debts and focus on searching for a job. However, dissenters claim that such a measure does not have a direct impact on solving the actual employment issue spec-centered recruitment and lack of quality jobs. In other words, there is no guarantee that lessening the financial burden will lead to successful employment.
In order to apply for a decent job in Korea, applicants are required to have specs-a list of qualifications that shows one’s excellence, which includes a high Grade Point Average (GPA) score, fluent English skills, and expertise related to the working field. Opponents insist that the current policy lacks in supporting individuals in strengthening their competitiveness in the labor market. Regarding this matter, the Ministry of Employment and Labor (MOEL) explained that clients enrolling in the service are obliged to report specific plans for job recruitment and take related classes every month so that they can improve their ability.
Yet, Professor Jang Won-chang (Department of Economics, Inha University) insisted that the budget of 500,000 won is not enough for students to acquire practical skills that companies demand of their applicants. Survey results from the Shinhan Bank Big Data Center showed that one spends an average of 13 months and over four million won solely in seeking for jobs. Meanwhile, the current fund offers a total of three million won for six months, with which recipients have to split for paying living expenses. Thus, critics claim that the young generation is short of money to join intensive job training programs.
Shrunken Labor Market for the Young Applicants
Furthermore, even if the allowances are used correctly, the job market is still too narrow for the unemployed to break through. According to the data provided by the Korea Employers Federation, the average competition rate for the employment of undergraduates recorded 32.3:1, meaning that only three out of 100 candidates were accepted in the recruitment process. Some claim that the fundamental solution to such a problem would be creating more job opportunities for the youth, and all means must be employed to expand the labor market.
Professor Jang, however, expressed concerns about the following situation. “It should be the business corporations that create jobs, not the government.” The professor mentioned that although the government can generate more jobs in the public services, such an increase will load a heavy tax burden on working people. But if it is done by the private sectors through innovations and expansion, existing resources of labor can be used efficiently without any additional cost. In regard to the matter, Professor Jang stated, “Government should promote a flexible environment by lifting regulations, so that companies can invest more actively.”
▲ Professor Jang Won-chang (Department of Economics, Inha University). Provided by Professor Jang Won-chang.
Meanwhile, France already has been deregulating relevant laws to settle down employment issues of the youth left behind. According to the Jobs for Youth: France report from the Organization for Economic Cooperation and Development (OECD), 11 percent of 15-24-years old experience difficulty in obtaining a stable occupation. In order to attract companies to create more jobs, the French government has eased financial regulations by cutting corporate taxes and abolishing progressive taxes for the foreign investors. Furthermore, the administration announced the creation of a new research complex in the major business district La Defense area to facilitate research and development.
The benefits that social monetary assistance for the youth can bring are clear. As a social safety net, not only does it encourage young generations to actively participate in seeking jobs, but it also offers an opportunity for the left-out youth of the lower class to escape from poverty. Still, it cannot be denied that the existing policy structure leaves some points to be improved. The administration should proceed with the system in connection with in-depth vocational training, so that the applicants are able to gain a competitive edge in the labor market. On top of that, regulations that have stiffened the economy should be relieved for businesses to expand the recruiting quota. Although the process may take time due to several difficulties, it is imperative to revitalize the shrunken labor market in the upcoming future.