Markets create jobs

Lee Sang-ryeol
The author is an economic news editor of the JoongAng Ilbo.

One of my friends is a professor of engineering at a college outside Seoul. His first piece of advice to freshmen and their parents every semester is to try to lower expectations. “Don’t even dream of working for a large company,” he tells them. “A mid-sized firm would be the best workplace you can find coming from our department.” Being honest with them, he explains, should help them face reality and focus on finding a job in a small- or mid-sized company after graduation. Some fortunate former students build up skills after two to three years and move on to bigger companies, he admits.

It’s a tough time for college graduates trying to find jobs at large companies. University graduates last year were estimated at 300,000. Job openings at large companies numbered around 30,000, according to Job Korea, a website for job hunters. Even counting out those who chose military service or studying for postgraduate degrees after graduation, many will be out of luck in terms of finding employment. The number of jobs that increased in the private and public sectors last year was a meager 97,000. Statistics Korea estimates that 693,000 people were looking for jobs in 2018, up 24,000 from the previous year.

And the outlook is even poorer this year. According to Saramin, another job website, 4 out of 10 companies don’t have plans to add new employees to their permanent payrolls this year or have not yet fixed their hiring plans. Out of 10 students graduating from four-year universities in February, just one — or 10 percent — has found a permanent job.

Jobs shrunk after employers were hit by a whopping 29-percent jump in the minimum wage over two years. Naturally, many are forced to cut back on employees. As a result, many of the 300,000 graduates this year from four-year universities were unable to find a full-time job.
One positive sign is that President Moon Jae-in has become more serious about economic affairs. He attends diverse business events and pays more attention to business leaders. On Jan. 15, he invited heads of all top 10 conglomerates, as well as smaller companies, to the Blue House. He pleaded with the bigger companies to play a bigger role in increasing jobs.

Some in the progressive camp disapproved of the president meeting with the chaebol leaders. But the meeting gave a sense of relief to the public. For many job seekers, promises from business leaders to increase job opportunities could be their only hope. The tycoons may have been reminded they can contribute to society by creating more decent jobs. A few days later, the president attended a hydrogen economy exhibition and jokingly said he makes a good marketing model for hydrogen cars.

To his new chief of staff, Noh Young-min, Moon said a meeting with corporate leaders was also a part of the chief presidential secretary’s job. Prime Minister Lee Nak-yon dropped by a Samsung Electronics factory in Suwon, Gyeonggi, and encouraged Vice Chairman Lee Jae-yong to combat the challenges from weakening chip demand. The so-called regulatory sandboxes enabling trial services and launches of products through exemptions in regulations for a certain period go into effect this year. These developments may help improve business sentiment and hiring.

Companies have also expressed confidence in the face of multiple challenges. When the president voiced concern over the deteriorating conditions in the semiconductor market, Vice Chairman Lee responded that Samsung will demonstrate its real potential during hard times. Hyundai Motor raised its sales target for this year despite its underperformance last year. The company has become more aggressive in U.S. marketing as well.

Start-up activities remain strong despite stubborn regulations, and entrepreneurs are keen to pursue their dreams. Park Byung-jong, who had to stop the world’s first bus-sharing business due to government regulations, sustains Call Bus Lab with 12 employees through a new charted bus service.

Jobs for young people are made by the market and companies. The government’s role should be reinvigorating the market.

JoongAng Ilbo, Jan. 22, Page 27