Federation of Korean Industries Publishes 'Three Laws of Youth Despair' Report

[Asia Economy Reporter Dongwoo Lee] The Federation of Korean Industries (FKI) announced on the 9th that it has published a booklet titled "Youth Despair 3 Acts, the Future of the Republic of Korea, Youth Jobs Are Disappearing!"

The booklet consists of a total of four volumes and contains the current status of youth employment (Volume 1) and the economic sector's opinions on three employment and labor bills pending in the National Assembly that are highly likely to deepen youth unemployment (Volumes 2 to 4).

Volume 1 provides an overview of the youth employment situation and the "Youth Despair 3 Acts." The perceived unemployment rate as of September this year is 25.4%, meaning one in four youths is unemployed, and the number of youths who have not found employment after graduation reached a record high of 1.66 million as of May this year. Three out of four large corporations are not hiring new employees or have no plans to do so, resulting in the disappearance of employment opportunities for young people.

Volumes 2 and 4 introduce the Youth Despair Acts. The government's amendment to the Labor Union Act includes key provisions such as allowing unemployed and dismissed workers to join unions and paying wages to union full-time officers. The FKI expressed concern that if the amendment passes, labor rigidity will increase further because the employer's means of response will be limited while union powers are strengthened, which will shrink new hiring.

Additionally, the retirement benefit system provides benefits only to workers with more than one year of service, with the employer bearing the full cost. The FKI forecasts that if the amendment requires paying retirement benefits even for just one month of work, the cost will be entirely borne by employers, thereby reducing their capacity for new hiring.

Furthermore, the law mandating direct employment for regular tasks prohibits indirect employment such as subcontracting, dispatching, and consignment for regular tasks, and considers violations as direct employment. This bill also poses a risk of shrinking new hiring. Mandating direct employment may restrict companies' free workforce management.

Choo Kwang-ho, Director of Economic Policy, explained the background of publishing the booklet, saying, "Youth unemployment is reaching an unprecedented worst situation due to excessive rigidity in the domestic labor market and the prolonged COVID-19 pandemic," and added, "In the National Assembly, bills that are more likely to worsen youth unemployment rather than alleviate it are being proposed one after another, so this is intended to raise social awareness about this issue."

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