Extra budget considered for jobsThe Korean government is not ruling out a supplementary budget or tax reforms to generate more job opportunities for young people.
The pledge comes as major restructuring is taking place at General Motors Korea and cash-strapped Sundong Shipbuilding and Marine Engineering, which are expected to boost unemployment in regions where they are based.
“We have to look into all possible policy realms whether it be budget, taxation, finance or regulation reforms in order to definitely create jobs,” said Finance Minister Kim Dong-yeon during a government meeting on Friday. “In the next three to four years, the youth population is expected to grow by an additional 400,000 with the eco generation.”
The so-called Eco generation refers to the offspring of baby boomers, people born between 1979 and 1992, whom already account for nearly 20 percent of the population.
“If we don’t solve the problem of youth unemployment, we could expect a disaster.”
“Areas that are undergoing restructuring including the shipbuilding and automobile sectors are expected to suffer worsening employment conditions,” Kim said.
GM has threatened to close down GM Korea’s plant in Gunsan, South Jeolla, by May, which could cost the jobs of 2,000 employees.
The company has already accepted voluntary retirements of employees at other plants.
On Thursday, the government announced that it will end its support for Sundong Shipping and Marine Engineering. A court will decide whether to liquidate the cash-strapped shipbuilder or try to turn it around. Either way, a major impact is expected on the economy of Tongyeong, South Gyeongsang, where the company is based in.
Additionally, while the government has given a second chance to another struggling shipbuilder, STX Ocean and Shipbuilding, which has been asked to come up with a turnaround plan by next month, the shipbuilder could still lay off 40 percent of its employees.
The Finance Minister particularly stressed that the government is looking into measures that will actually work, admitting that in the last 10 years, governments have announced 21 policies to improve job prospects for young people.
“I have been told to approach the issue from a different angle compared to the past,” Kim said.
Korea’s youth unemployment rate at the end of 2017 was 9.2 percent, up from 7.5 percent just five years ago.
The government has been hinting at the possibility of a supplementary budget to improve the job situation, which was a key campaign pledge by President Moon Jae-in.
Moon he promised to add 810,000 jobs in the public sector through 2022.
As of end of last year, government tax revenues reached a new record of 265.4 trillion won. This was 22.8 trillion won or 9.4 percent larger than tax revenues in 2016, which gives the government some leeway for an additional budget to create jobs.
BY LEE HO-JEONG [firstname.lastname@example.org]