[Editorial] Raising labor flexibility is key to creating jobs

The job market for youths has turned slack. According to job data from Statistics Korea, the number of employed in the age group from 15 to 29 fell by 5,000 in November compared to the same period a year ago. It is the first monthly year-on-year decline since February last year. The jobless rate rose sharply for the young in particular. In contrast, the employed number of those aged 60 and older increased by 480,000. Even taking into account the thinning in youth population, the phenomenon sounds alarms in our society.

The job market outlook for next year is not bright either. Hiring will be hampered by stagflationary pressure on the economy. The Bank of Korea and other economic institutions predict that Korea’s economic growth rate will fall under 2 percent. Exports have been falling for eight straight months since April. Some companies are gearing up for an emergency time due to sharp deterioration in their performance. Under such circumstances, it would be difficult for large companies to increase full-time quality jobs next year.

The insecurity in the job market for young people could go beyond the economic front. In foreign countries, unsettled young people hitting the streets to protest has been a social problem. The blank-sheet rally in China to protest the government’s draconian zero-Covid policy owes much to a spike in youth unemployment. The jobless rate for young Chinese aged 16 to 24 jumped 19.9 percent before coming down to 17.9 percent in October.

In Naples, Italy, more than 26,000 competed for the opening of 500 permanent municipal street sweeping job. That shows how tough it is to find a job in a city with its unemployment rate nearing 40 percent for the young generation. The winners were congratulated by the mayor.

To create jobs for young people, the government must be friendly toward business. Companies must invest to make jobs for young people. The income-led growth policy so ardently championed by the previous Moon Jae-in administration only worsened the job market for young people, as it only helped increase temporary public-sector jobs.

The Yoon Suk-yeol administration must broaden the playing field for companies to recruit more players for their business. Deregulation and reforming the overly rigid labor market are urgent. Such stumbling blocks for companies should be removed immediately. Our labor market must become flexible in accordance with their work time and wage terms. Companies in return must increase hiring. A fundamental solution to the young joblessness is changing the environment for businesses through regulatory and labor reform.