Labor market’s ‘flexicurity’ should be enhanced

The number of jobless college graduates in South Korea reached an all-time high in April in two years, reaching 603,000. This is an increase by almost 30,000 people from last year and the highest figure since the statistics agency started compiling data in 1999. Moreover, 44 percent of some 510,000 college graduates staying unemployed was those aged between 15 and 29 (224,000 people) as of the first quarter of the year, signaling the country’s youth taking the brunt of a shortage of jobs.

Statistics Korea has explained that the number of the unemployed in April rose because nearly 180,000 more people prepared for an exam to become public officials this year, and exams were mostly in April. Those who are preparing for employment are counted as economically inactive population, but they are classified as the unemployed if they apply for exams. Jeong Tae-ho, senior secretary to President Moon Jae-in for job creation, said that while an average of 97,000 people landed jobs in 2018, some 170,000 to 260,000 South Koreans are expected to have new jobs every month this year. “Though it is still difficult, the employment situation is improving compared with that of last year,” Jeong said, attributing the improvement to the government’s policies such as the development of new industries and the launch of the second venture boom project. However, even though numbers point to a better reality, a considerable number of new jobs are temporary positions created with tax money. With young people feeling as if the unemployment rate goes over 25 percent, the pain people need to go through is greater than numbers.

To create more decent jobs and stop abnormal trends where people flock to civil service exams, there should be support for starting a new business and business activities. At the same time, government support should not be focused only on the youth launching start-ups. Given that middle-aged people show a higher success rate of starting a business, its needs to be ensured that these people can get government support without discrimination. Thus far, if the government stressed the importance of encouraging the young to establish a new business, all ministries introduced the same, overlapping policies, to no avail.

In addition, the government must double its efforts to reform the country’s labor market. Many European countries, which used to suffer from the chronic issue of unemployment, have been able to see their employment rate grow thanks to the improved flexicurity of the labor market. Countries like Germany, Sweden, Denmark, and the Netherlands, while protecting the unemployed with social safety nets, enhanced workers’ job security and businesses’ employment flexibility by allowing fixed-term and dispatched positions. There is not a single job that would be completely safe from new technologies and new industries. Strengthening safety nets by providing employment insurance, for example, and securing the labor market’s flexibility would be the way to save businesses, industries, as well as workers.