Unemployed, young face an uphill battle

The decline of Geoje and Gumi bears more meaning than mere regional economic stagnation. In fact, the backlash over delayed industrial reformation is finally materializing, even taking its toll on the region as well as the nation.

Regardless, postponing industry-wise restructuring is not a viable option even if it entails growing pains.

If manufacturing companies continue to struggle, the crisis may also sting financial institutions, mainly the lenders, leading to an irrepressible economic crisis. For this reason, analysts continue to emphasize the importance of keeping a tight rein on the overhauls before it is too late.

“Restructuring may look like a painstaking process in the short term,” said Kim Sang-jo, a Hansung University economics professor. “But it will eventually pay off. Regardless of the excruciating pain we see right now, we must push ahead with the turnaround plan.”

Still, with conglomerates tightening their belts, local workers, who cannot depend on the labor unions, are in for a rough ride. Government initiatives to protect the workforce have achieved little. Plans to assist the hardest hit areas with unemployment benefits and training, for example, are still hung up in the National Assembly.

Currently, there are two main impending issues. First, workers from the shipbuilders’ subcontractors as well as the young population need aid. Then, manpower and capital must be channeled in a new direction.

In some areas where employment instability has reached a critical point, bold financial investments and policies must be used as short-term measures. “The sudden decline in the employment rate in certain area forces the people to spend less, which then worsens the regional economy as whole, said Nam Sung-il, professor of economics at Sogang University. “This will in turn further lower the employment rate, and the situation repeats itself continuously. It is a vicious cycle.

“The pressing task is providing vocational training and unemployment benefits to the unemployed so they can get by, while getting ready to find a new job to be economically independent again.”

Some also called for labor unions to have a more expansive view. “Labor unions must be aware of the industry-wide crisis and stop clinging on their own job security so that everyone can survive together,” said Yu Byoung-gyu, president of the Korea Institute for Industrial Economics and Trade.

BY HA NAM-HYUN [choi.hyungjo@joongang.co.kr]