For jobs, chaebol set the standardSamsung Group has pledged to invest 47.8 trillion won ($41.7 billion) in revitalizing its business and newly hire 26,000 people this year. The capital investment and new recruitment by the country’s largest conglomerate is up 12 percent and 4 percent, respectively, from last year. Though the new hiring does not quite match the rise in investment, both come as good news for the shrunken job market. LG Group and SK Group also announced ambitious hiring and investment plans that beat market expectations.
Conglomerates seem to have paid special consideration to how to help revitalize the domestic economy amid a raft of grim forecasts of slowed growth this year. The economy is expected to increase by around 3.5 percent in 2012 due to global uncertainties and other factors. Moreover, in a bid to promote equal opportunities and tackle the high rate of unemployment among young people, many chaebol have ramped up their recruitment drives of students without college diplomas.
Labor data shows that Korea’s unemployment rate hit a trough in the fall of 2010, then improved considerably as 500,000 new jobs were created last October and the jobless rate dropped to around 2 percent for the first time in nine years.
However, Minister of Strategy and Finance Bahk Jae-wan has come under fire for overplaying the importance of such statistics. In Korea, new jobs should increase by more than 320,000 a year to maintain the status quo, but new hiring has hovered way below 300,000 since 2005. Amid the global financial crisis, it slumped to 145,000 in 2008 and contracted to minus 72,000 the following year. As such, unemployment still weighs heavily on the economy.
The job market needs a strong impetus, but most analysts expect only 260,000 new jobs will be created on-year, down from over 320,000 in the previous two years. As such, this may prove another tough year for job seekers, making it even more important that the government maintain stable growth in employment even if many of these are in the form of irregular or part-time positions.
Fortunately, large companies have set the standard by creating more job opportunities. In the longer run, the conglomerates have made the right move. Now it is the government’s turn to reward them through deregulation to rejuvenate their corporate activities. All sides must pitch in to keep the economy generating at least 320,000 jobs a year.