Direct aide to unemployed youth would not create decent jobs

The Youth Hope Foundation, which will manage the Youth Hope Fund, was launched on Thursday. For 40 days since the president donated 20 million won (17,567 U.S. dollars) and 20 percent of her monthly salaries as the first benefactor, the fund has raised an accumulated donation worth more than 60 billion won (52.7 million dollars) as of Thursday. Although the government said the fund will be raised with money donated voluntarily by the leading members of Korean society, major corporate donors have contributed in accordance with their sizes, as Samsung Group Chairman Lee Kun-hee donated 20 billion won (17.6 million dollars) and Hyundai Motor Chairman Chung Mong-koo contributed 15 billion won (13.2 million dollars). In the first place, the fund was to be a quasi-tax on corporations and entrepreneurs.

What the Youth Hope Foundation will do is a bigger challenge. It was launched with a rough plan to use the fund to set up a one-stop job information center and vocational training for unemployed youths. However, the plan overlaps with the government`s 2 trillion won (1.8 billion dollars) plan to create jobs for them. It could have been better if corporations used the money they donated to the fund to create jobs directly.

The Seoul Metropolitan Government announced a five-year plan Thursday to provide young job seekers with a monthly average of 500,000 won (439 dollars) for two to six months and hire young interns at public organizations. The purpose is to provide young job seekers after graduation with a social stepping stone by offering them the financial assistance. Even major welfare countries in Europe such as Germany and France offer financial assistance to jobless youths but such measures are not the fundamental solution to the high youth unemployment. Earlier this year, the city of Seongnam in Gyeonggi Province announced an ordinance calling for providing all young people at ages between 19 and 24 with one million won (878 dollars) a year. However, the Ministry of Health and Welfare has put a brake on the plan.

There are concerns that doling out cash directly could result in a waste of money rather than boosting the economy or creating jobs. We are concerned if local governments will compete in "dispersing" money ahead of next year`s parliamentary elections, just as politicians pledged free school lunch before the gubernatorial and mayoral elections in 2011.

At a forum held at the National Assembly last month, the state-run Korea Development Institute attributed the high youth unemployment to the stagnation in the promising services industries, including finance, education, health and tourism. The institute also announced its survey result, in which 80 percent of youths wanted a job in the services industry. Politicians and the government should collect their thought to pass a bill calling for the promotion of the services industries and implement structural reforms aimed at creating jobs for the young.