Cash handouts not a solution

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Cash handouts not a solution

Mr. Nam, 27, has worked temp jobs since college to pay for his tuition and expenses. Upon graduation, he has been looking for a job for three years but experienced a series of failures. Then, he participated in the Ministry of Employment and Labor’s “Successful Job Search Package.” He consulted his mentor and drafted an employment plan. The mentor recommended positions, and he signed up for a law class. He received subsidies for the 200,000 won ($170) tuition and other expenses.

After three months of preparation, he joined a law firm in Gyeonggi as a paralegal earlier this year. “I still remember my first day at work after a sleepless night. I was full of anticipation.”

What would have happened if he only received cash, not consultation? Could he have become a paralegal? A consulting professional at the Employment Support Center was assigned to him, helping him from A to Z. The mentor also checked on him after he found the job. Nam would never have considered being a paralegal, but the mentoring and consultation helped him explore the options and set a new goal.

On Nov. 5, the Seoul Metropolitan Government announced a 500,000 won “youth benefit” for up to six months to unemployed young citizens from low-income families. The move inspired heated discussion. Critics say that it was Mayor Park Won-soon’s “populist policy for the election.” Supporters argued that the subsidies were not different from basic living subsidies and childcare subsidies.

On Nov. 12, the Social Security Commission sent a letter to the city government to submit a specific plan and consult the commission since the unemployment subsidy would be a welfare program. However, the city explained that it was not a welfare program since the allowances are meant to cover job search costs. The city claimed it would allow young people to keep searching without losing hope.

But the allowance is all about money. What’s more important is the professional mentoring. Will job opportunities open just by offering subsidies? It is a widely accepted theory in social work and welfare studies that offering cash to those capable of working is not effective in improving the employment rate. The Employment Ministry’s package provides cash allowances only when vocational training is 80 percent complete.

In developed countries, cash subsidies are based on “mutual obligation.” Ahn Sang-hoon, a professor of social work at Seoul National University, said that “cash welfare” always brings a moral hazard, and it is more desirable to provide services such as vocational training. It seems that Seoul announced the program without reviewing the impact of side effects. There are many things that money cannot accomplish. Hopefully, the city government will come up with a successful employment package.

The author is a national news reporter of the JoongAng Ilbo.

JoongAng Ilbo, Nov. 20, Page 33


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