Thank you and sorry

Youth unemployment predisposes a society to all sorts of problems. It can be the culprit of causing low birthrate and economic depression. In order to have babies, a couple needs to get married. One cannot start a family without a decent job. Having a job and family is just the beginning of life’s problems in Korea. The family must afford the killer rent prices. Newlyweds have to defer having a family.

Raising a child is also a challenge. A working couple cannot find time to take care of the baby because they often have to work late. When the child gets older, the cost of education goes up as most Korean students go to hakwon - after-school private academies. There is no end to the monthly bills. A family often cannot afford more than one child and many have to put off having children as long as possible. Scarcity in decent jobs is the source of this vicious cycle. It is no wonder that Korea has the world’s lowest birthrate of 1.3.

Birthrate has direct effect on the economy. The fewer the population, the less tax there is to collect. The real estate market takes a direct hit. Home prices of commuter towns nearby urban cities in Japan have been shaved by a quarter. Consumer spending would naturally be depressed. So begins a recession. The older generation by and by joins the retirement cadre. Social welfare costs shoots up. Demographic charts all reflect such trends. The ratio of the young, middle age people and seniors was 23:49:28 in 2013. In 2023, the ratio will be 18:42:40. The burden on the young is becoming greater. As soon as they get on the payroll, they must yield a sizable portion for social welfare for the old. The national pension will soon run out of money and we, too, like Japan, may have to issue debt to sustain the senior population. It is no bluff that the country will run into a bankruptcy by 2030.

If young people have jobs, we could at least alleviate problems related to birthrate and economic slump. But most of the young people eye jobs at large companies with fierce competition. They cannot be blamed. They vainly try for large companies because the pay is much higher than what their smaller counterparts can provide. The gap in salaries between large and smaller companies comes to around 2 million won ($1,684) a year in Japan. It is why more than 70 percent of college graduates finds job.

Japan has shifted pay system from the base of working years to performance from late 1980s. Those hired on a temporary basis are guaranteed with jobs for five years. There is no time limit for agency workers. Japan has not only transformed the system, but also the mind-set on work. People are encouraged to manage both work and family. All these changes have been led by the government with the goal of raising birthrate from current 1.43 to 1.8.

While spending the Christmas break in Japan to gather materials for work, I saw a TV documentary on changes in work environment with the episode on Itochu Corporation. Since last May the country’s second-largest trading company requires all employees to start and finish work early. Overtime work requires approval from the boss. Four out of 10 employees choose to work under the new way. They have more free time in the evening. This also worked well for the company. Overtime expenses were reduced by 7 percent, cab fees (since employers must pay for late-hour transportation costs) by 20 percent, carbon emissions by 8 percent and electricity cost by 6 percent.

Japan will force government employees to work less from this year by banning overtime and forcing them to take legal paid holidays. The corporate sector is required to increase the use of annual paid leave to 70 percent by 2020 from 44.8 percent in 2013. The campaign to end the harsh work-culture is possible because Japan already has established the legal grounds. It has long tried to reduce work hours and make the job market flexible.

We no longer can expect to increase growth by milking the last drop of productivity from the workforce. From 2014 to last year, the local economy grew in the 0 percent range for five straight quarters. If there is no more to squeeze out from the labor force, the system must change. This cannot take place without yield from the older generation. It is unethical to expect to live off the taxes of the younger people in post-retirement age while enjoying all the perks and compensations during working years.

The National Assembly brimming with the old-school politicians is dragging its feet on labor reforms. A child born on the first day of 2016 will be 24 in the year 2040. He or she will be burdened with welfare costs of 5 million won a year. We welcome the newborns to our society with a heavy heart.

JoongAng Ilbo, Jan. 4, Page 28

*The author is an editorial writer and senior reporter on labor affairs at the JoongAng Ilbo.

by Kim Ki-chan