The number of people who are highly educated but economically inactive has been increasing at an alarmingly high rate during the past decade ― surely an unwelcome reminder to parents that the costly efforts to send their children to university may not pay off.
As opposed to the economically active population, those economically inactive are people who do not work and, at the same time, do not meet the internationally agreed definition of unemployment. In other words, they are neither “employed” nor “unemployed.” They are categorized into four groups ― attendant at educational institutions, retired at an early age, engaged in family duties and economically inactive in other ways.
Among the economically inactive Korean population are nearly 3 million people who have graduated from two-year and four-year colleges or other higher education institutes. They account for 18 percent of the total economically inactive population, up from 11.2 percent a decade ago.
According to a recent report from Statistics Korea, this population increased 79.6 percent from 1,644,000 in first quarter of 2001 to 2,952,000 in the first quarter of 2011. The report provided no figure about how many of them had retired, and so pose no serious problem as far as labor is concerned.
Presumably, many of those economically inactive people have given up the idea of actively seeking employment when jobs available to them are considered to be beneath them. They are often referred to as “discouraged” workers.
Decent jobs are not easily created at a time when colleges and universities are sending out an increasing number of graduates each year. When such jobs are not available, discouraged graduates simply give up, rendering the high level of education they have received useless.
Many Koreans overeducate themselves out of the job market, with more than 80 percent of high school graduates being admitted to colleges or universities each year. The ratio soared from 33.2 percent in 1990 to 83 percent in 2009 ― a phenomenon often referred to as “inflation in education.”
It goes without saying that businesses should be encouraged to create many jobs for college and university graduates. If so, their jobless rate will go down. Moreover, large corporations can afford to increase their investments and thus put more people on their payrolls. They earned so much last year that operating income exceeded 1 trillion won at more than 20 listed companies.
Actually, the Federation of Korean Industries, a lobby for big businesses, committed itself to creating 3 million jobs during the next eight years. Still, it was easier said than done, as evidenced by an increase in the number of unemployed college and university graduates from 321,000 in 2009 to 346,000 last year. They may just give up if they are forced to lower the bar in their pursuit of a job.
The population of college and university graduates classified as economically inactive will not decrease substantially if more than eight out of every 10 high school graduates continue to be admitted to colleges and universities. Instead, more high school students should be given incentives to seek employment, not higher education, after graduation.
Indeed, “meister” high schools ― vocational schools heavily subsidized by the government to produce a skilled workforce ― are advanced as an answer to this problem. The government provides 3,600 students enrolled in 21 such high schools with scholarships and accommodates them in dorms free of charge.
At a time when big businesses cannot afford to create as many jobs as needed for college and university graduates, they should be encouraged to work with the government in fostering vocational high schools. By doing so, they will be able to help rein in inflation in education and get easier access to well-trained staff.