Job market still in trouble

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Job market still in trouble

The number of working people in Korea greatly increased last month. According to Statistics Korea, there were 23.8 million people in work in September, an on-year increase of 71,000, the biggest rise in 10 months.

But it’s not a cause for celebration. A closer look shows that most of the new jobs are in the public sector with low pay.

Aside from the public field, the manufacturing and construction industries have failed to bounce back to last year’s level. The unemployment rate in September was 3.4 percent, 0.4 percentage point higher than a year ago. And those between the ages of 20 and 34 account for the majority of the unemployed. Basically, youth unemployment remains a serious problem.

President Lee Myung-bak said during an emergency economic meeting Wednesday that while the economy is improving, the employment situation is still a matter of grave concern.

“If someone says the job situation will drastically get better within one or two years, it is just empty political rhetoric,” he said.

At least the president has accurately analyzed the real problems of the job market. But the solution to more jobs is still predictable. The Prime Minister’s Office has said it will spend 3.5 trillion won ($3 billion), 800 billion won more than last year, to try to create jobs next year, and will carry out the budget within the first half of 2010. The government plans to create 650,000 new jobs, including 100,000 jobs via the employment assistance program, 50,000 for youth interns and 140,000 jobs in the social service sector. The government has apparently concluded that the job situation won’t improve much by the second half of next year and has decided to create jobs during the first half.

We fully understand the government’s efforts to create jobs and lower the unemployment rate. We also know that even if the economy did get better, the number of jobs wouldn’t suddenly soar in the short term.

But increasing the number of jobs in the public sector will have only a limited effect and could hinder job creation in the private sector in the mid to long run. If the government keeps applying first-aid measures, the employment structure that relies on government help will suffer in quality, which will weaken motivation among prospective employees.

The best way to create jobs is for the economy to grow, leading to an increase in demand for work in the private sector. Temporary hiring plans in the public sector are just stop-gap measures, and the government should seek a more earnest employment scheme in trying to revitalize the economy and stimulating corporate investment, so that the private sector can voluntarily expand its employment.
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