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Wage peak system to create 8,000 jobs: PM

[THE INVESTOR] Prime Minister Hwang Kyo-ahn said on Sept.1 the government’s efforts to promote the wage peak system among public organizations in the country could create 8,000 more jobs for young people through next year.

Under the wage peak system, employees accept a reduced salary before retirement that frees up money that can allow firms to hire new workers. South Korea has been promoting the system since last year as a solution to tackling rising unemployment among the youth.

Hwang added that public organizations have implemented far reaching changes to reduce excessive debts and improve lax managements. The top policymaker added the government will extend efforts to get work places to adopt a performance-based payment system over seniority-based salaries.

“The debt-equity ratio among public organizations, which stood at 217 percent in 2013, plunged to 183 percent last year,” Hwang added.

The prime minister added Seoul will improve the productivity of public organizations and utilize them more fully to lend support to the national economy.