Experts advise focus on job safety netWith the incoming Park Geun-hye government’s pledge to raise the country’s employment rate to 70 percent, experts are debating what practical measures would get the job done, with many saying the focus should be on closing loopholes in the employment safety net rather than on artificial job creation.
According to Yoo Kyung-joon, a researcher at the state-run economic think tank Korea Development Institute, one solution would be to help the estimated 10 million low-income people not covered by the national employment insurance.
According to data by Statistics Korea, about 2.8 million Koreans at workplaces with fewer than five workers, which are not registered as corporations, do not subscribe to the insurance. An additional 4.1 million employees who are eligible for insurance remain without it for a variety of reasons, the data showed. Adding to that, self-employed people are excluded from the national coverage.
“There are about 10 million people in total who are excluded from the benefits of national employment insurance,” Yoo said. “This population belongs to a gray area where they are not protected by the country’s safety net.”
The researcher said the incoming government needs to expand insurance coverage to include low-wage earners at small workplaces.
Starting last year, the government allows workers earning less than 1.25 million won ($1,159) a month at workplaces hiring fewer than 10 people to subscribe to the insurance.
According to the Yoo, temporary workers who get less than 60 hours a month also are not eligible for insurance benefits. “The number of temporary workers will increase as the aging of society accelerates, so it is urgent to include,” he added.
Sohn Min-joong at Samsung Economic Research Institute said it would be difficult to create as many new jobs as the president-elect wants considering the sluggish economic growth.
To reach 70 percent employment, about 250,000 new jobs would be needed each year, according to Sohn.
For every GDP increase of 1 percentage point, about 70,000 new jobs are added, he said.
Other analysts said the economy should grow by more than 5 percent annually to achieve Park’s goal. Korea’s employment rate, the proportion of working age adults employed, stands at 63 percent. The rate for young people has been around 40 percent.
“Rather than trying to create jobs through economic expansion, it would be better if the government helps out the vulnerable classes, like females and the handicapped,” said Sohn.
By Song Su-hyun [email@example.com]
More in Economy
Gangbuk beats Gangnam
600,000 jobs added last year, but many public or welfare
Consumer price gains pick up speed in November
Life expectancy up 7 months for Koreans born in 2019
OECD knocks tenth of a point off Korea's 2020 growth