Gov‘t to tackle youth unemployment with KRW 4 trillion won extra budget plan

Mar 16, 2018, 08:14 am

By AsiaToday reporter Cho Sang-eun

The South Korean government aims to tackle chronic youth unemployment by trying every possible method, including bolder financial and tax incentives.

The government on Thursday announced "Measures for Youth Employment" during the youth employment report meeting held under the chairmanship of President Moon Jae-in.

The country's youth unemployment has been worsening for many years.

According to the Ministry of Strategy and Finance, the real youth unemployment rate has been steadily surpassing 20% since 2015.

There is growing concern that it will become even tougher for job seekers in their 30s to find a job as they'll have to compete with the Eco-generation, who will begin seeking jobs in earnest near future.

This is why the government measures are focused on young jobseekers.

The government plans to increase income for young SME workers to the level of salaries offered by large corporations by strengthening financial support.

This is aimed at narrowing wage gap between large and smaller companies, which has been considered a key reason that young jobseekers are hesitant about starting their career in smaller firms.

Also, in a bid to nurture start-ups, young entrepreneurs and those with an annual sales of less than 48 million won will be exempted from corporate and income taxation for five years.

The government also plans to increase hiring by public agencies to some 28,000 from its earlier planned 23,000.

In order to solve the fundamental problem of youth unemployment, the government plans to continue seeking structural responses in the industrial, educational and labor fields.

The government will actively support the job-creating efforts of companies through regulatory reforms on investment that boost jobs and accelerating innovative growth. It will also improve the labor market structure by reforming the education and training system and improving employment flexibility.

The government expects to create up to 220,000 jobs over the next four years through the measures.

The unemployment rate for youths is also expected to fall by 1 to 2 percent.

The problem is the budget. Although the measures will be set for the next four years by 2021, enormous financial input is inevitable for these measures.

"A budget supplement for the implementation of youth employment measures will be around 4 trillion won," said Finance Minister Kim Dong-yeon in a joint briefing at the Government Complex-Seoul. Kim said the government plans to submit the extra budget bill to the National Assembly in early April.

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