Announcing Analysis on Labor Market Impact of 2.2 Trillion Won Employment Support Fund

'2021 1st Employment Policy Council Meeting' Held
Approval of 20 Employment Impact Assessment Tasks This Year
In-depth Analysis of 5 Areas Including COVID-19 Response

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] The government plans to conduct an in-depth analysis of how the Employment Retention Subsidy, which received an investment of about 2.2 trillion won last year, positively impacted the labor market.

Aside from unemployment benefits, which amount to nearly 13 trillion won, the subsidy policy is the largest project under the Ministry of Employment and Labor. The ministry intends to analyze from multiple angles how much it has improved the labor market’s structure.

The Ministry of Employment and Labor announced on the 28th that it held the first Employment Policy Deliberation Committee of 2021 from the 25th to the 27th via written procedure and selected and approved 20 employment impact evaluation tasks for this year. Employment impact evaluation is a system that analyzes how major policies affect employment.

The Deliberation Committee consists of 29 members, including Minister of Employment and Labor Lee Jae-gap (chairman), 9 government members, 4 labor and management representatives, and 15 private experts such as employment specialists. When the ministry’s working department deems a topic requires review by the committee, it is submitted for discussion within this consultative body.

This year, 20 tasks were selected across five fields: 'Impact and Response to COVID-19' (5 tasks), 'Korean New Deal' (4 tasks), 'Industrial Revitalization' (3 tasks), 'Innovative Growth' (3 tasks), and 'Fair Economy and Regional Balanced Development' (5 tasks).

The core focus is to analyze how COVID-19 affected employment quantitatively and qualitatively, including job numbers, working hours, and wages. The goal is to provide implications applicable in the event of future global pandemics.

In the task titled 'Impact of COVID-19 Infection Spread on Employment,' the committee will analyze the patterns of sudden employment shocks caused by social distancing measures.

Particularly, the employment stabilization effects of the Employment Retention Subsidy, which involved a budget of 2.2777 trillion won, will be verified. The ministry plans to review directions for system improvements considering Korea’s labor market conditions through comparisons with foreign countries.

Although it cannot be said that the problems lie solely with the subsidy system, it is true that Korea’s employment indicators last year were the worst since the International Monetary Fund (IMF) financial crisis. The number of employed persons decreased by 218,000, the largest drop since 1,276,000 in 1998 during the IMF crisis.

Moreover, cases of fraudulent claims surged. From January to November last year, there were 468 cases (7.9 billion won), compared to 28 cases (800 million won) in 2019, 17 cases (420 million won) in 2018, and 15 cases (160 million won) in 2017.

While the increase in fraudulent claims naturally follows the expansion of support scale, there is a growing call to strictly regulate those exploiting blind spots.

Tasks will also be pursued on the impact of COVID-19 on employment in the travel industry, which is a specially supported employment sector, the employment impact of income support policies such as disaster relief funds, and changes in working methods after COVID-19.

In the Korean New Deal sector, the impact on employment of policies expanding offshore wind power generation, growth of green industries, and large-scale CCUS (Carbon Capture, Utilization, and Storage) projects will be analyzed.

Among the four related tasks, three were selected as Green New Deal projects. This is because the '2050 Carbon Neutrality (net zero carbon emissions) Promotion Strategy' was announced, making low-carbon industry growth a key task.

Additionally, tasks were selected on regional economic revitalization and responses to population decline, the impact of changes in college-age population on regional employment, employment effects of the pet-related industry growth, and employment impact of platform transportation business activation.

Meanwhile, last year’s employment impact evaluation results were also reported. Representative tasks include 'Impact of the Workplace Harassment Prevention Act on Employment' and 'Impact of Kiosk Expansion on Employment in the Food Service Industry.'

Reports on last year’s task results will be published on the Employment Impact Evaluation Center website in early next month.

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