Last month, a record high of 583,000 people stopped searching for a job after many failed attempts at looking for one. About half of them were those in their 20s and 30s. According to the Statistics Korea, the number of young job seekers preparing for exams to land a job was over 850,000, the highest since data collection began in 2006. The chance of getting a job will inevitably be less when there are more job seekers with less job openings in the market. A structural problem, where young people give up looking for a job or find themselves unemployed for a long time after preparing for exams to land a job, is being repeated in society.
One out of three job seekers is preparing for exams to become a public servant. The proportion of people preparing for exams to land a job at private companies has reduced as more people are looking to become a public servant. It appears the rigidity of the labor market and a sharp increase of the minimum wage has played a role in this trend. Private companies are scrapping their large-scale open recruitment system due to the burden of keeping employees until their retirement age. Coupled with restrictions against companies, private companies are reporting weaker employment intentions.
Labor unions of some conglomerates, such as Hyundai Motor Company, have vowed to stage a strike, demanding an extension of retirement age. To be sure, there is a need to extend the current retirement age due to aging and declining population. However, if the employment period of the existing employees is extended, young job seekers will find it harder to land a job. This is an issue that requires social consensus but the government is sitting back and doing nothing.
The government is relying solely on finances, leaving behind structural problems of the job market. After offering low quality jobs created with taxpayers’ money to young people, it has now incorporated youth measures into the Human New Deal policy. It plans to introduce a savings program, where young people, who save 100,000 won every month, will receive benefits worth up to 300,000 won every month. This program requires a budget of 8 trillion won. Such a measure is only a temporary solution if the government fails to come up with fundamental measures for unemployment.
Gyeonggi Governor Lee Jae-myung, one of the top contenders for the presidential election, has caused a controversy by proposing youth loan and a plan to provide young people with 10 million won for world trip. Former Prime Minister Chung Sye-kyun’s plan to offer up to 100 million won to young people seeking financial independence or former Prime Minister Lee Nak-yon’s plan of depositing 30 million won in the bank to young people discharged from the military are no different from the current administration’s policies that rely on finances.
The current administration has less than 10 months left in office. It lacks the will to reform the labor sector and remove barriers to recruitment for private companies. Even the Moon Jae-in administration has the will, it is hard to expect that the government will produce tangible results in the short term. If those presidential contenders fail to come up with decent solutions for the job market, young people will find themselves feeling even more hopeless. Presidential contenders should keep in mind that young people are watching who is sugarcoating and who has the will and strategies to actually address the youth unemployment issue.