A recent survey of major local firms on their employment plans must have further frustrated the country’s young job seekers, who have encountered a particularly harsh labor market.
Half of the companies that responded to the poll by the Korea Economic Research Institute said they have not yet fixed hiring plans for the second half of this year. Nearly 25 percent of the firms replied they would not recruit new employees in the period.
Many of the firms with hiring plans said they would employ fewer workers than in the same period last year.
The institute surveyed South Korea’s top 500 firms by sales and received answers from 120 of them.
Its results indicate that the country’s job market will worsen, particularly for young people, amid the prolonged coronavirus crisis. A similar survey conducted early this year showed 41.3 percent of the large firms had no plans of up opening jobs or had yet to confirm their recruiting plans for the first half of the year.
The economic impact of the coronavirus pandemic combined with a set of business-unfriendly measures taken by President Moon Jae-in’s administration is exacerbating youth unemployment.
According to government data, the actual youth jobless rate stood at a record 25.6 percent in July. The indicator captures a more substantial picture of the problem as it counts those working fewer than 36 hours per week or who intend to join the workforce while currently not engaging in job-seeking activities.
Young job seekers are now complaining that they have been stripped of even the opportunities to apply for jobs.
Amid a complex crisis of a pandemic exacerbating an already deepening economic downturn, many companies face difficulty staying afloat, let alone laying out future business plans.
Nevertheless, if a large portion of the younger generation fails to join the workforce, the country will see its growth potential wither steeply down the road and its post-pandemic economic recovery may be limited and slow. Moreover, a feeling of frustration and helplessness permeating young people will result in the loss of the dynamics of our society as a whole.
The Moon administration’s employment policy has been far from instrumental in expanding job opportunities for youths.
It has been preoccupied with creating short-term and temporary jobs by using taxpayers’ money to cope with deteriorating employment conditions in the country.
The government is planning to spend 30 trillion won ($25.2 billion) next year, up 20 percent from this year, on funding various job programs.
But more than 3 in 4 jobs to be created through fiscal expenditure are set to go to senior citizens aged 60 or above. They will mostly be paid for picking up trash, pulling up weeds, preventing people from feeding pigeons and so on.
What is essential to ease the worsening youth unemployment problem is to forge a corporate-friendly environment that enables companies to increase investment and offer more of the jobs preferred by young job seekers.
Even before the coronavirus pandemic struck, local companies were being weighed down by a string of anti-corporate measures taken by the Moon administration since it assumed office in 2017.
Moon has recently called for drastic deregulation but has yet to turn his repeated rhetoric into practice.
Contrary to his recent gesture, the ruling Democratic Party of Korea is pushing to enact a horde of bills aimed at imposing additional regulations on companies.
If the Moon government is sincere about easing youth joblessness, it should depart from efforts to gloss over employment figures by creating temporary jobs for senior citizens and focus on lifting regulations and enhancing labor market flexibility to encourage companies to increase investment and hire more workers.
It should be noted that in the recent KERI survey, most companies cited regulatory and labor reforms as the best way to increase employment.
The Moon government also needs to be more active in carrying out industrial restructuring to facilitate the growth of new industries that could provide more job opportunities for youths.
Local universities must change their curricula to educate students to better meet corporate needs. The vocational training system should also be overhauled to better fit demand in the post-pandemic era.