The next five yearsYouth unemployment is serious. Young people who haven’t found a job are in despair, giving up on dating, marriage and having children. Parents are heartbroken to see their children jobless after raising them with love and education.
The youth unemployment rate is at nearly 10 percent. About 430,000 young people are seeking jobs but haven’t been successful. The youth unemployment rate itself is worse than in other developed nations, but the percentage of highly educated jobless people is far higher. Many give up their job search, and others are employed part-time.
Society should provide opportunities for young people to grow and contribute. In the JoongAng Ilbo’s “Reset Korea” project, many economic specialists said youth unemployment was a priority task to recover growth engines and resolve economic polarization. They agreed that more jobs for youth should be created by reviving the economy, easing regulations, encouraging start-ups, supporting solid small and medium-sized businesses, and making the labor market flexible.
The next five years are expected to be an especially challenging time for the young generation due to the population structure. Korea’s baby boom lasted from 1955 to 1963, and every year, more than one million babies were born. Each woman had an average of 6.1 babies. Last year, 410,000 babies were born, and the average woman has 1.2 babies.
The baby boomers brought many changes to our society. As they got married, more babies were born. From 1991 to 1995, an average of 720,000 babies were born annually, about 80,000 more than the babies born in the late 80s. Then the number of newborns drastically decreased to 630,000 in 1998 and 550,000 in 2001.
The babies born in the 90s are now in their 20s. Lately, the number of jobless youth has grown not just because the economy is slow but because more young people are looking for jobs. The population of people aged 20 to 29 in 2016 was 180,000 more than in 2011. While the number of young and employed people increased by more than 90,000 in the last five years, there are far more young people seeking jobs. As a result, the number of unemployed has also increased by more than 110,000.
The Bureau of Statistics predicts that the population aged 20 to 29 will remain at the current level until 2021 and decrease by 160,000 in 2022 and 390,000 in 2023. Then, young people will find it easier to get a job. As most of the baby boomers retire, Korea will actually be short of labor.
But it is important to prepare immediate plans for the young people seeking jobs today. They will be wasting their knowledge and skills if they don’t find their first job for a long time, and then, it will only get more difficult to enter the labor market. The government should provide vocational education and training opportunities and refer job seekers to companies. Opportunities for young people to practice and acquire skills should be expanded, and start-up funding and customized consulting should be offered.
“Reset Korea” proposed an ambitious plan for the government: select 50,000 young people and have them work at innovative small and medium-sized companies, providing them with a considerable portion of wages and pension. It is a policy that can be funded by the 1 trillion won ($872 million) budget set aside to deal with unemployment, a plan that is currently not very effective.
The unemployment crisis is getting worse as young people are afraid of working for small companies. While job seekers should lower their expectations, the government should help them acquire field experience by sending them to innovative small companies and supporting technological development, overseas market exploration, and legal and accounting work.
Although presidential contenders are making campaign promises to increase the number of civil servants or provide living subsidies to all unemployed youth, these plans could add permanent financial burden or extend their unemployment. It is desirable for the government to expand the budget for start-ups and encourage innovative private companies to hire more young people while increasing a limited number of civil servants in necessary areas.
Another effective plan is intergenerational hiring. The baby boomers over the age of 55 work reduced hours and share the job with young people. Moreover, the government must provide child care leave and flexible work hours to working parents and offer assistance to companies hiring young people as well. Then, it will help boost both the fertility rate and unemployment.
The next five years are very important. We need to make a society where young people can have hope by creating and sharing more jobs as we revitalize the economy.
Translation by the Korea JoongAng Daily saff.
JoongAng Ilbo, Feb. 9, Page 35
*The author, a former senior economist at the Asian Development Bank, is a professor of economics at Korea University.