Korea : Country of Youth Unemployment
Korea : Country of Youth Unemployment
  • YNO
  • 승인 2009.09.01 10:44
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Korea : Country of Youth Unemployment


The Korean economy has been going through a long-term slump, and as a result youth unemployment has also risen steadily. In order to solve the problems of youth unemployment the Korean government has established youth internship programs. However, the government's programs have been criticized as temporary remedies. How can we cope with the problem of youth unemployment permanently? There seem to be very few realistic remedies for solving youth unemployment.


Recent Employment Rate


The Korean youth employment rate was 27%, which was much lower in comparison to other OECD member countries in 2007. The average youth employment rate of OECD member countries was 46%, so the 19% difference in the employment rate of Korean youth is alarming. The number of Korean employees under 30 years old is also decreasing. Job seekers from 15 to 19 years old accounted for 48,000 in the unemployment statistics and ages 20 to 29 accounted for 133,000. These statistics in November 2008 shows that the youth unemployment rate for these ages is higher than any other age groups.

According to a survey conducted by the Korea Society Opinion Institute, the majority of people who responed (56.5%) to the following question, "How effective do you think the government's efforts for creating jobs will be?" said, "I don't expect much," in February of 2009.

These problems have had a direct effect on Yeungnam University graduates. In 2007, 60.86% of graduates found a job, and in 2008, 66.86% were successful in finding jobs. In 2009, YU has actively attempted to provide more support to students with additional job placement programs and services, but early predictions indicate employment rates will be similar 2008 at best.


Introduction of Irregular Worker System


One of the major causes of instability in the current job market is the irregular worker system. So, before you think about applying for a youth internship program, you should learn more about the irregular worker system.

Irregular workers, such as part-timers, contract employees, and temporary workers are not classified in the same way as regular workers. They were introduced in order to create more flexibility in employment. However the irregular worker law has been criticized by the labor unions, as providing inferior work compared to regular workers. There are also concerns about unstable conditions of employment. In spite of these concerns and criticisms, the use of irregular workers has spread quickly since the Asian financial crisis in 1998, also known as the IMF crisis in Korea. At that time, the number of irregular workers increased due to their flexibility in the labor market. Now, the number of irregular workers has become a large part of the whole.


Irregular Workers' Problems


Irregular workers face many problems. One of the biggest problems is discrimination between regular workers and irregular workers. Regular workers are protected against unreasonable dismissal, but irregular workers are contracted for short terms between 1 and 2 years. The employers can extend the contracts if they choose. Irregular workers face many very real disadvantages. For example, there is a great deal of instability in employment, and they often do the same work but receive less pay. The labor law guarantees minimal protections for workers, but irregular workers often do not receive even minimal protection.

The labor law also often paints irregular workers into a corner. The law is written to provide protection to irregular workers after irregular workers work for the same employer for 2 years. After 2 years they can be considered regular workers. However, in most cases irregular workers are employed for less than 2 years. There are some laws made to protect irregular workers, the irregular workers law was initially established to provide some protection for irregular workers, but the law makes it difficult for irregular workers to take advantage of any benefits. The number of irregular workers who continue to work beyond the two years required for labor law protection are continually decreasing.

There have been well publicized cases that highlight the problems of irregular workers. In 2007, there was the E.Land case. At first the company asked for voluntary resignations from its irregular workers who were coming up on 2 years of employment. Voluntary resignations are sometimes used by companies when an employee has done something they could be fired over. By resigning the employee can keep the dismissal off their work record. However, most companies abuse this system and ask for resignations when no offence has been committed. The E.Land employees refused to resign. Finally, most of the E.Land workers were fired by the company because they did not accept the company's order. After the mass dismissals the workers demonstrated and unlawfully occupied the store. The occupation lasted for 510 days. Management and labor finally came to a settlement and most of the irregular workers were able to keep their jobs.

In 2008, there was also the Giryung Electronics case. The law prohibits employing temporary workers in permanent jobs and positions that require technical expertise. However, about 300 of the 350 employees at Giryung Electronics are temporary workers, and they mostly work in what would be considered permanent positions. Their wages were only 10 won an hour more than the minimum wage, and their contract terms were only for 3 months at a time. The company would even dismiss workers via text message. Even though the company violated labor laws and committed these heartless acts, they were only fined 5 million won. This company treated their workers like disposable items and not people. There was another recent case at Myongji University. MU dismissed nearly 100 people in February 2009. These assistants were fired before the beginning of the semester in order to solve some financial problems. Some of these assistants had worked there for more than 10 years. Although they attribute the dismissal to financial difficulty, they replaced the workers they fired with new administrative assistants. If the reasons for these dismissals were financial problems, MU should not employ new assistants. They contradict themselves.

Korea Labour & Society Institute Representative Jong-Jin Kim

Q|Why did Korea introduce the irregular worker system?

A|The irregular worker system was introduced in order to stabilize the society. Korea suffered due to the IMF relief loan in 1998. The irregular worker system was introduced as a flexible countermeasure in the financial crisis. In the near future the irregular worker system is going to change. Irregular workers will be able to work under irregular status for 4 years rather 2 years.


Q| What is the biggest problem with the irregular worker system?

A|When the company employs irregular workers, expenses are cheaper than they are for regular workers. Irregular workers do not require any insurance, and irregular workers are easily dismissed if business slows.


Q|How can we solve youth unemployment problems?

A|The government is trying to provide solutions for youth unemployment. The government created NewStart to help young workers who are unemployed. NewStart creates administrative internships, and employs new officers. However, these two plans do not have any real impact on solving youth unemployment problems. Administrative interns can work for short-terms, mostly 6 to 10 months, and compensation is low, about 1 million won per month. They are also unable to receive qualification as regular workers, and they mainly perform simple tasks.


Q|How can we create more jobs for young workers?

A|The government needs long term plans. More importantly, social services need more detailed plans. I especially think that social services need more interns. Other branches of the government also need to address the issue. For example, education, health care, social welfare, and social services can all contribute to a solution. A good example is that social services are now suffering from a lack of workers.


Q|What are the advanced plans of other countries?

A|Currently, the global youth unemployment rate has increased 7.9%. In response to this situation many countries in Northern Europe have built job training centers. The unemployed can receive job training at these centers for up to 3 years. This center focuses on helping not just the unemployed but also students.


The irregular worker system is one of the causes of the increase in youth unemployment. Many youth internship programs have been created in response to the irregular worker system. This article will examine current issues effecting youth internship programs. Being an intern means you are learning a job, and doing the work at a company or institution for a period of between 6 and 10 months. Ideally internships for university students will be in fields related to their study. There are many youth internship programs, for example, administrative internships, public enterprise internships, small business internships, etc. There will be about 5 million youth internships given this year. However, there are some bad aspects to these internships that should be pointed out. We did careful research into youth internship programs and we would like to report on some positive things before detailing the bad aspects. Gyeongsan City Hall has implemented their youth internship well.


Good Example of The Youth Internship Program


YNO met Mr. Hong at the geography information department of Gyeongsan City Hall. Mr. Hong said, "I am working in the geography information department. My main responsibility is correcting wrong addresses. I am preparing the Korea Cadastral Survey Corporation, and now I need to get more assistance from interns. I have been working on this project for 2 months, and they are helpful to me. The most important thing, students should find an internship that suits them." We also met with Jung-Ki Min in the department of Industry & Economy. He said, "In Gyeongsan, there are lot of university students who want to get jobs. We usually assign students to internships that are related to their major work department, and we provide mentors. Interns can learn from their mentors. We also look at internships as a step on the way to becoming a regular worker."


Bad Example of The Youth Internship Program


The Gyeongsan City Hall internship program is run well. However, most youth internship programs are not run as well. Some internship programs put students into simple labor jobs such as, copying documents and making tea. Interns do not have any chance to access the administration network or learn useful skills. Daegu Job Center representative Gum-Sun Hwang said, "Internships are supported by the Ministry of Labor. Many intern programs are limited to small businesses." And Woo-Min Son who is on the staff of the Career Placement Service Team at Yeungnam University said, "Many internships are not helpful to students careers." She told YNO about one episode, she asked one company manager who wanted to employ interns, "Do you want students with related majors?" the manager said, "We don't care, the interns are just part-timers." Actually, the internship programs were abolished in 2006. Research by the Korea Development Institute basically admitted in 2004 that, "Internship programs made problems which hurt the employment chances of regular workers." If internships increase in order to decrease unemployment statistics interns may actually have to remain irregular workers after they graduate.


Several Reasons Why Youth Internships Seem Makeshift


There are more important problems than decreasing unemployment statistics. Gum-Sun Hwang said, "Now the youth unemployment rate is pretty high, so the government enforces youth internship programs. In the future, youth internships should be changed in order to make them into regular workers when they are finished."

There are several reasons why youth internship regulations seem so makeshift. When you are actually unemployed you might not be classified as being unemployed for a few reasons. For example, if you are not actively seeking work, you are not classified as unemployed. If you are taking a class at an academy for professional training you are not classified as being unemployed. When you have a part-time job, you are also not considered unemployed. Also, if you worked in a youth internship program for only a few months, you are classified as an employed person.

Another reason companies like to take advantage of youth internships is to reduce the cost of starting salaries. Initial salaries in Korea are high compared with those in other countries. Accordingly, public enterprises and the financial sector would like to reduce initial salaries as a means of cutting costs. However, the biggest problem is that initial salaries have already been reduced, and companies don't mention this in their employment plans.

Gum-Sun Hwang also said, "The other problem is the government's policies. The government creates policies that are similar to a tail wagging a dog. Basically, youth internships are supposed to be used in order to create jobs for students as regular workers, but now the government is increasing the number of irregular workers rather than creating positions for more regular workers."


Ideas for solving

Youth Unemployment


We have to fix the irregular worker system and the youth intern system. First the government needs to establish regular employment principles. When employers are faced with labor difficulty they will inevitably use irregular workers as a solution since the government makes it expedient. The government also makes it easy for the employer to treat irregular workers unfairly. The International Labor Organization advises member nations, including South Korea, to contract temporary workers when they have reasonable cause. For example in Western European countries, such as Germany, France, Spain, and Portugal there are restrictions on the use of irregular workers. Our government needs to adopt similar restrictions. The government's New Deal Policy will invest more than 5000 billion won over four years in order to stimulate the economy and create jobs. However the majority of the jobs that have already been created are in the civil engineering, construction, and building industries. We need to create jobs in social welfare to assist in social equality and economic efficiency. If the stimulus money is spent to create jobs in the social welfare industry the money will go further and put more people to work. According to the Bank of Korea the same amount of money spent in the social welfare sector would create 3 times as many jobs as it would in the manufacturing industry, and 30% more jobs than it would in the construction industry. Currently, only 3% of the workforce is involved in health and social welfare. The government should take the lead and create new social welfare jobs. In Belgium they have the "Rosetta Plan" which states that a company must have at least 3% of their workforce made up of previously unemployed youth. If a company violates the law, they will be fined up to 74 euro per person they are short. However, if the company meets its benchmarks, they will get immunity from the welfare burden. These kinds of innovative policies are needed in our society.

University students are not benefiting from the current youth intern system. The youth intern system and irregular worker system have created instability in the labor market. The economic downturn will be prolonged as regular workers are not getting fair wages. Therefore the government should not take temporary measures, but they must seek long term solutions after more discussion. We think that employment in the manufacturing industry will gradually be reduced because of developments in labor saving technology. We can predict that robots will someday do most if not all of the work. Therefore, the time has come to expand employment opportunities in the service and social sectors. The social welfare market is an underdeveloped field requiring more attention and human sensibility. The government must find new and innovative ways to approach the problem. There are good examples in other countries facing the same problems as Korea. The government must also be wise in spending our taxes. If this economic crisis has taught us nothing else, it has shown us that we must have a plan. Today's university students as tomorrow's workforce need viable solutions not the same old song and dance.


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