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Korea's major corporations lag behind OECD peers in job creation

Korea's major corporations lag behind OECD peers in job creation

Posted February. 28, 2024 07:37,   

Updated February. 28, 2024 07:37


A study conducted by Korea's state-run research institute revealed that excessive support and stringent regulations against large corporations have led to small-to-medium-sized enterprises (SMEs) experiencing the "Peter Pan Syndrome," where they resist further growth. The report highlights the need to revise policies hindering SMEs from pursuing expansion, as their growth into larger firms could generate more employment opportunities, alleviate competition for college admissions, and boost the fertility rate.

On Tuesday, the Korea Development Institute (KDI) published a report titled "The Nation Needs More Jobs from Large Companies." The report reveals that large companies contribute only 14% of the nation's total job market, ranking Korea last among 32 OECD member countries. This figure falls significantly below the OECD average of 32% and is a mere one-fourth of the United States' figure (58%), which tops the list. According to the OECD, large companies employ 250 people or more.

The report highlights that the scarcity of jobs in large companies intensifies competition among job seekers and college applicants. Workers from top colleges in the highest 20% group reportedly earn up to 1.5 times more than those from colleges in the lowest 20% bracket. Additionally, the limited availability of positions in large firms may hinder access to welfare programs, potentially impacting the birth rate negatively, particularly as SMEs often struggle to provide adequate welfare benefits such as child-rearing leave.

The report contends that government policies are constraining large companies, which could offer higher-quality jobs. It suggests that excessive government support for SMEs is discouraging their growth. Conversely, large companies face heavy regulation, including restrictions on operating hours for hypermarkets.

세종=송혜미기자 1am@donga.com