Letting down the unemployed

In February 1999, I was covering a story about irregularities at a vocational school in Busan, Korea’s southern port city. The government of President Kim Dae-jung consigned retraining programs for people laid off in the 1997-1998 financial crisis to vocational schools. Some schools were suspected of embezzling government subsidies by identifying night school students as jobless to inflate enrollment.

I began to wonder why the schools needed to inflate the numbers when jobseekers were everywhere. The problem was with the curriculum. The schools charged with the wrongdoing mostly ran classes on car repair and other mechanical jobs. The problem was that there were few companies in those fields left in Busan that could afford to hire new people. A car manufacturing plant of Samsung Group was insolvent. To the vocational school administrators, of course, the government program was an out-and-out windfall. They squandered the money by purchasing luxury cars and real estate properties.

In May 2005, the Labor Ministry under President Roh Moo-hyun opened centers to promote employment in six districts in Seoul. I was in the entourage covering then-labor minister Kim Dae-hwan during his visit to one of the sites. One of the centers was in a building in the expensive commercial district of Teheran-ro in southern Seoul.

The office looked decent and was packed with students and jobseekers researching jobs. When I looked around a corner, there stood a pool table. Bookshelves were filled with comics and popular novels. The space hardly conveyed the urgency and desperation of jobseekers. It was a poolhall for hanging out and killing time.

A university graduate who majored in communications wanted to pursue a career in public relations. He was on a government program to aid youth employment, but does not expect to get much out of it. He joined the program after receiving a text message from his school saying that the program pays each applicant 150,000 won ($136) for taking a first-stage career propensity test at his college. He wondered what use the test would be at a time when he was about to graduate. He took the test for the money. He soon regretted starting the next training session. What he needed was communication skills as a PR officer and language proficiency for the career of his wishes. But most of the five-hour lectures were on office automation.

The class members were randomly chosen and ranged from high school and college graduates to retirees. His consultant dryly said it was better to attend the class if he had nothing better to do.

President Park Geun-hye and her government have strengthened policies on youth employment, and 20 offices offer 159 related programs. But the youth unemployment rate has been hitting record highs. The government budget to promote youth employment remains far below the average of countries in the Organization for Economic Development and Cooperation. What’s worse than the dollar sums is the quality of the programs. The support works out mostly for the suppliers — companies and training institutions — and does little for the unfortunates on the demand end, the young job-seekers.

The central government and Seoul city government are at odds over the city administration’s decision to give allowances to jobless youth. The government lashed out at Seoul Mayor Park Won-soon’s program to pay 500,000 won a month to unemployed or underemployed young people, calling it a populist platform. Yet the government itself suddenly came up with the similar idea of handing out cash allowances to young jobseekers. Moral hazards are inevitable once cash is handed out to unemployed young people.

And that risk is paltry compared to the moral hazard of vocational schools that embezzle government subsidies; the Human Resources Development Service of Korea, which used a budget for the unemployed for overseas training for its own staff; and companies that abuse young interns they take handsome subsidies to hire. It is not important who came up with the idea of cash subsidies for the young unemployed first.

Seoul’s mayor should not be so angry about the government stealing his idea.

What’s important is that the local and central governments join resources to tackle the youth unemployment problem in a practical and realistic way.

JoongAng Ilbo, Aug.18, Page 28

*The author is the planning editor of the JoongAng Sunday.

Cheong Chul-gun