Boosting youth hiring

Small and medium-sized enterprises (SMEs) in Korea usually wrestle with chronic labor shortages. It’s not strange, therefore, even if it’s hard to find young workers at small factories.

By contrast, many young college graduates are out of work ― the employment rate among youths aged 15-29 remained at 39.7 percent in March, compared with the OECD average of 50.9 percent. This may be a natural outcome, considering that seven out of 10 high school graduates enter university.

The package of measures unveiled by the government Tuesday to tackle the youth jobless problem is intended to help induce youngsters into SMEs by offering incentives. Specifically, its point is to bring forward the dates of youths getting jobs and create a milieu conducive to their long-term stay.

Most notable among the measures is the introduction of a “Korean-style vocational school,” modeled after Switzerland’s apprenticeship vocational education system. Students attending the proposed school are supposed to receive vocational training three or four days a week at enterprises while studying in school one or two days.

To encourage high school graduates to enter SMEs instead of college, the government will offer a 1 million won incentive each year for up to three years. There are incentives for businesses employing high school graduates as well. If they re-hire the employee after he returns from obligatory military service, the government will bear up to 250,000 won of his monthly salary.

Given that the previous youth employment packages have produced little, it may be natural that the latest one is also in doubt. But it’s essential to find a clue to the entrenched problem, considering that it holds the key to revitalizing the economy.

Strategy and Finance Minister Hyun Oh-seok was right in this regard to say that youth unemployment is a problem that can’t be resolved in the short term, and that there should be structural reform in the nation’s employment system.

Fundamentally lurking behind our labor market woes is a mismatch between supply and demand, and the situation is all the more serious in the small corporate sector. What’s needed therefore is to encourage more high school graduates to find jobs at SMEs at a time when most parents still want their children to enter university despite the long-held job crisis among college graduates.

Toward that end, SMEs ought to change drastically in terms of working conditions and wage levels, although it’s easier said than done. If not, the youths will continue to shun them, resulting in the latest package failing once again.

So SMEs should make voluntary efforts to improve working conditions and enhance management transparency, and the government needs to support these efforts more actively. The korea times