Gyeonggi offers aid to young workers at SMEs

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Gyeonggi offers aid to young workers at SMEs

The Gyeonggi provincial government will provide employees aged 18 to 34 at small and medium-sized companies with 300,000 won ($267) a month for two years as part of financial aid to encourage business to hire younger workers.

The regional government said in a release Monday that it hopes the measure will change the negative perception held among many young job seekers about working at a small business by closing the salary gap with employees of major conglomerates.

“At the center of this policy drive is to directly help young workers at small and medium-sized enterprises so that they can feel a wage increase while at the same time addressing the low-wage problem [at SMEs],” the government said.

Under the plan, which was drafted on Aug. 16, the Gyeonggi government will dole out 300,000 won a month to workers aged 18 to 34 who earn 2 million won or less a month and work at least 36 hours a week for 24 months.

In sum, a beneficiary will receive 7.2 million won from the two-year program. The program will run through 2020 and is designed to benefit 20,000 young workers.

The government also plans to aid SME workers by assisting with their installment savings for 11 years. For example, if a worker puts 100,000 won in a monthly savings account, the provincial government will match the deposit. It hopes to help 10,000 workers with this program.

In Korea, there is a wide disparity between working conditions at SMEs and major conglomerates, leading many small businesses to struggle with recruiting workers, even as youth unemployment in the country has hit a record high.

In Gyeonggi, the number of companies categorized as large is 516, making up a meager 6.8 percent of all companies in the province, but they have 403,000 workers, or 10.7 percent of the workforce there.

“With this policy, I expect to induce more people to work at small and medium-sized companies for a long period of time and bring more young people to such companies,” said Nam Kyung-pil, governor of Gyeonggi. “I hope that this measure contributes to enhancing small and medium-sized companies’ hiring competitiveness and producing quality jobs.”

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