Toward the new paradigm of labor policy

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Toward the new paradigm of labor policy

Lee Jung-sik

The author is Minister of Employment and Labor.

As the Korean economy slows down due to rapid industrial and demographic shifts, the labor market is going through a qualitative change in both demand and supply. On the demand front, high-tech jobs are increasing fast on a transition to the low-carbon and digital economy while conventional jobs in the manufacturing and labor-intensive service sectors continue to decline. On the supply front, jobs continue to decline due to Korea’s low birthrate and fast-aging population. Meanwhile, a new form of employment rapidly expands after the arrival of the platform economy.

Due to such fundamental shifts, Korea’s labor market is at a critical juncture. To confront the changes affecting the quality and quantity of jobs, it is essential for the Yoon Suk-yeol administration to lay the foundation for a sustainable job policy. In this vein, the government will pursue the following policies in preparation for the massive transformation on our labor market.

First of all, the government will enhance the efficiency of existing labor policies while securing necessary funds for future-oriented investment. In 2021, the government implemented a total 180 job programs worth 30.5 trillion won ($21.2 billion). Considerable cash subsidies were granted to fight the pandemic while similar and repetitive programs were not trimmed properly. The current situation requires an intensive re-adjustment, such as normalizing the Covid-19 recovery budget and boldly curtailing low performing programs. To this end, the new administration is pushing to improve the efficiency of job programs and secure budget by slashing employment subsidies worth 1.43 trillion won in its new year’s budget proposal.

Second, the government will spend saved money in strengthening the protection of vulnerable groups. For young people, the “Youth Jumpstart Guarantee Package” will be launched next year to help the young settle into the labor market fast by providing job experience opportunities and vocational training from college years. To support the elderly, subsidies for their employment and retention will increase further. To help working parents, the government will double subsidies for their reduced workhours for childcare and expand the “3+3 Parents Childcare Leave,” a system in which significantly larger parental leave wages are granted for the first three months if both parents use parental leave. Furthermore, an institutional framework will be established to protect workers on special employment and platform workers, who have been marginalized from the safety net of the current Labor Relations Act.

Third, the government will provide support to ensure labor demand meets supply in the process of industrial restructuring. Semiconductor and software industries express concerns about shortages of readily available talent. The government will increase funding for high-tech training programs operated by the private sector, semiconductor majors in polytechnic colleges, and joint training centers in cutting-edge industries.

In addition, it is crucial to support reemployment and job transfer for workers in declining industries. To this end, the government fully supports a legislative process to pass a “Bill on Employment Stability Support during Industrial Transition” this year. For the shipbuilding and manufacturing industries, additional measures tailored to each industry are being crafted as a follow-up to the measures announced in August to address labor shortages.

Fourth, the government will help local governments to create jobs given a wide gap between metropolitan and local areas in job opportunities. Due to the drain of young talents, local areas even face the danger of disappearing from the map. To address this issue, the Ministry of Employment and Labor will transfer more authority to local governments so that they can spearhead various job creation programs. If an “Act on the Promotion of Employment in Local Areas,” which is still pending in the legislature, is passed promptly, the government’s efforts to boost local employment will be carried out on a stable footing.

Fifth, the government will advance a national employment service to connect employers to job seekers. At the moment, “Job 24” — an online platform that recommends job openings and fitting talents based on AI and allows people to apply for employment subsidies online — is in a pilot operation jointly with the ministry to launch by 2024. In addition, the one stop service for employment and welfare programs will be further strengthened around the work and welfare centers across the country. The government will also devise measures to further innovate employment services in the coming fourth quarter.

What will our labor market look like after proactively confronting the ongoing structural transition? I picture a vibrant labor market where businesses create quality jobs and vulnerable groups such as youth, the elderly, women and the disabled are protected adequately and work together. To turn this vision into reality, the government will exert all effort to implement its labor policies.
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