Job Committee: "Korean-Style Unemployment Assistance Must Be Implemented Quickly...Significantly Expand Job Safety Net"

Issue Brief 'Q&A' Launch... Policy Proposals for COVID-19 Response
"Employment Deterioration in Major Countries... Delayed Government Response Hinders Economic Recovery"
Vice Chairman Kim Yong-gi: "'Youth Guarantee' Should Be Included in Korean New Deal"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] The Presidential Committee on Jobs announced on the 30th that "Korean-style unemployment benefits should be introduced and implemented promptly, and the employment safety net, including employment insurance coverage for all workers, should be significantly expanded."

On the same day, the Jobs Committee published the inaugural issue of the issue brief "Q&A" and suggested that the government should take such measures to minimize the impact of the novel coronavirus infection (COVID-19) on the employment situation.

Due to the COVID-19 outbreak, the employment situation in major countries such as China and the United States is deteriorating. China, which was the first to be affected by COVID-19, saw its urban unemployment rate surge to 5.3% in January, 6.2% in February, and maintained a high unemployment rate of 5.9% in March. Experts in China estimated that about 220 million migrant workers were unemployed in February due to movement restrictions caused by COVID-19. Including this, the actual unemployment rate in China in February is estimated to have reached 31.7%.

In the United States, even though the survey was conducted before the full-scale lockdown (March 8?14), the employment rate (ages 15?64) fell by 0.6 percentage points compared to the same month last year, and the unemployment rate rose by 0.6 percentage points. The decline in employment in the service sector, such as entertainment and hospitality, led the drop in the employment rate. The number of new unemployment benefit claims from the third week of March to the third week of April reached 26.45 million, accounting for about 17% of the employed population in the U.S. The Congressional Budget Office warned that the unemployment rate in the second quarter would exceed 10% due to the impact of COVID-19.

The Eurozone and the United Kingdom have not yet announced employment trends for March. However, considering strict outing restrictions and stagnation in business activities, it is expected that the unemployment rate will worsen to around 12%, similar to the European debt crisis period.

According to the World Economic Outlook released by the International Monetary Fund (IMF) this month, the economic growth forecasts for major Western countries such as the United States, Canada, Germany, and France were revised downward by about 8 to 10 percentage points compared to the previous survey. The U.S. unemployment rate forecast was revised upward by 6.9 percentage points.

In South Korea's case, the economic growth forecast was revised downward by 3.4%, and the unemployment rate forecast was revised upward by 0.3 percentage points. Regarding this, the Jobs Committee evaluated, "Compared to the Group of Seven (G7), the Eurozone, China, and others, South Korea's economic growth and unemployment rate forecasts were adjusted the least," adding, "This appears to reflect South Korea's successful response to COVID-19 compared to other countries."

However, they expressed concern that "if the government's response is delayed, the funds held by companies and households will be depleted, causing significant damage to the economy and making subsequent economic recovery difficult."

Job seekers participating in the '2019 Employment Success Ilgu Day' held at Seocho District Office in Seoul on the 18th are asking questions about on-site recruitment interviews. Photo by Jinhyung Kang aymsdream@

Meanwhile, the Jobs Committee emphasized that "the expansion of employment safety nets for vulnerable groups such as special employment workers and freelancers, who are in the blind spots of social safety nets like employment insurance, should be actively considered."

They further advised, "Through the early passage of the legal basis for the National Employment Support System (formerly the Act on Promotion of Employment and Vocational Stabilization of Job Seekers), which is pending in the National Assembly, Korean-style unemployment benefits should be introduced and implemented promptly, and a significant expansion of the employment safety net, including employment insurance coverage for all workers, should be considered."

Kim Yong-gi, Vice Chairman of the Jobs Committee, also introduced the 'Youth Guarantee' system, which Europe implemented first, stating, "The government's role is to protect vulnerable job groups from the market's volatility and instability."

The Youth Guarantee system, implemented in European Union (EU) member countries, is a program that provides young people under 25 who have graduated from school or left their previous jobs with opportunities for good jobs, additional education, or internships to become professionals within four months. The youth unemployment rate, which was 24% in 2013, improved to 14% in 2019 due to the implementation of the Youth Guarantee system.

Vice Chairman Kim said, "I hope that the newly created Korean New Deal and post-COVID-19 measures will include the full introduction of Youth Guarantee, which guarantees bold jobs, education and training, and internships for all youth under 35," adding, "It would be even better if the target is expanded from youth to include self-employed individuals and women with career interruptions."

This content was produced with the assistance of AI translation services.