The ruling Democratic Party of Korea and the government announced Thursday 20-trillion-won special measures for the youth to provide rent assistance to young people with low income and expand financial aid to cover half of the college tuition to the middle class. They have put forward a total of 87 support measures since June, including a plan to provide deposit-based rental homes and other support measures for the youth announced on three occasions.
The party and the government decided to introduce a system to provide 200,000 won per month to 152,000 young non-homeowners for up to one year and interest-free loans of 200,000 won for monthly rental in the first half of next year. They will also provide a grant of 9.6 million won to small- and medium-sized companies that hire young people per employee per year in order to encourage the employment of 140,000 young people. Measures to help the youth are necessary as young people are struggling with fewer job opportunities for those without previous experience due to COVID-19 and high housing prices and deposits. However, a significant number of the 87 measures are to simply provide one-off cash, which raises a question if they can fundamentally address the issues among young people.
In order to reduce the gap among young people, the government decided to expand financial aid to cover half of the college tuition to the middle class, which includes a family of four with a monthly income of 9.75 million won. It reads as a populist policy as it would be more efficient for the government to focus on vulnerable groups given the limited financial resources. Other measures that are under similar criticism include helping those who served in the military to save 10 million won and introducing ‘healthy mind vouchers’ to offer counseling service worth 200,000 won per month to young people struggling with ‘COVID-19 blues.’
What’s most necessary to bring fundamental improvements to young people’s lives is creating high-quality jobs. A similar policy as the measure to provide a grant of up to 9.6 million won to small- and medium-sized companies that hire young people per employee per year was introduced in the past but didn’t have much impact. Instead, more fundamental measures, such as relaxing the regulations on the number of available spots at universities to increase opportunities for young people to find jobs in cutting-edge industries, should be urgently put forward.
The government set aside an unprecedented budget of over 600 trillion won for the next year, including 20 trillion won for special measures for the youth. This will cause the national debt to exceed 1,000 trillion won next year, most of which will fall on the future generations. It is irresponsible to take credit by providing financial support to even those not needing it with the debt for which the future generations will be responsible.