Government incentives to reduce youth unemployment
Seoul (AsiaNews/SCMP) South Korea plans cash incentives to enterprises willing to hire unemployed youth. Job-creation has become a top priority for the government and is an indication of the critical state of youth employment in the country at a time when the economy is undergoing profound changes.
The government is offering small- and medium-size enterprises anywhere between 5.4 and 7.2 million wons (3 to 5,000 euros) per year for every young worker they hire for more than three years. The proposal falls within the policy framework undertaken in support of small business and employment.
Last year, Seoul spent 362.3 billion wons to address the problem of youth unemployment. This year, it has allocated more than 500.
In the past, a university degree was the golden key to enter the job market. However, South Korea's economy and industrial system have undergone profound changes and today's graduates now face discouraging job prospects.
Traditional labour-intensive industries are moving abroad, to places like neighbouring China where wages are lower and contracts flexible. At the same time, new technologies and telecommuting have reduced demand for labour.
Youth unemployment, especially in the 15 to 29 range, stands at 7.7%, twice the national average. Paradoxically, an increasing graduation rate is aggravating the problem. As jobs become scarcer high school graduates pursue higher education to be better qualified. In 1970, one graduate in four went to university; now four in five do the same. In the meantime, many are not waiting for government policies to bear fruit; instead, they specialise abroad so as to be more marketable at home.
"The latest data in the United Kingdom (UK) show that, percentage-wise, university students from South Korea are at the top, and perhaps second worldwide," said Shoba Ponnappa, Director of the British Council in South Korea. The Council is the organisation responsible for attracting foreign students to UK educational institutions.
According to official data, there were 350,000 South Korean abroad last year, twice as much as five years ago. First on the list of favoured destinations is the US, followed by Canada and Australia. A growing number of young South Koreans are also opting for higher education in Asia, especially in Japan and China.