Before COVID-19, Hong Nam-gi Worried About "Jobless Growth"... Promoting Cash-Based Policies

Minister of Employment Ahn Kyung-duk Also Visits Same Place on Same Day
'9 Million Won Per Person' Youth Special Hiring Incentive Policy Sales

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki visited Ventavr in Mapo-gu, Seoul on the 20th and experienced virtual reality (VR). Photo by Kang Jin-hyung aymsdream@

[Sejong=Asia Economy Reporter Moon Chaeseok]

"Due to the decline in employment creation caused by industrial structure advancement, technological development, and the emergence of artificial intelligence (AI), growth without employment is inevitable." (A statement made by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki during a joint government briefing on employment trends in 2019 on January 15 last year)

"The government will ensure that the recent difficult employment conditions, such as the trend of growth without employment and the contraction of the job market due to COVID-19, do not leave scars on the youth and the MZ generation." (A message mentioned by Deputy Prime Minister Hong during his visit to VentivR, a virtual reality (VR) company in Mapo-gu, Seoul, on the 20th)

Deputy Prime Minister Hong mentioned again the "growth without employment" he was concerned about before the COVID-19 crisis. He believes that even before and after the COVID-19 recovery, no matter how much other indicators such as exports and investment improve, "employment" will not easily recover. The "growth without employment" mentioned by Deputy Prime Minister Hong was a phrase he used even before the COVID-19 crisis, and it was a statement made less than a month after a similar remark was made at a special committee discussion on income-led growth (Soju-seong) policies. In other words, he judged that the employment market would remain sluggish for the time being regardless of COVID-19.

Deputy Prime Minister Hong and Minister Ahn Kyung-duk both rushed to Mapo on the afternoon of the 20th, one hour apart. The official reason was to review youth job-seeking policies, and the message was to respond to recovery without employment. Minister Ahn visited Foodnamu, a KOSDAQ-listed company, at 3 p.m., and an hour later, Deputy Prime Minister Hong visited VentivR, a company specializing in VR equipment and content production.

Both promoted cash-based policies that provide up to 9 million KRW per person for a maximum of one year. They jointly reviewed existing policies, including the "Youth Special Hiring Incentive." The special incentive policy was approved by the Cabinet on the 18th. It is a program that supports business owners with up to 9 million KRW per person for up to one year if they hire youth aged 15 to 34 as regular employees and meet other conditions. Since this involves budget spending to provide cash support to youth, noticeable effects are expected to reduce criticism. Because corporate response is crucial at the beginning of policy implementation, although the visits appear to be field inspections, many see them as ministers directly engaging in "policy sales."

Both mentioned the "April employment trend youth expanded unemployment rate of 25.1%." They presented the harsh reality that one in four young people cannot find their desired job as the rationale for policy sales. Due to the polarization of the employment market between regular and non-regular workers, hiring trends of large companies reducing open recruitment because of income-led growth policies summarized by increased labor costs and strengthened distribution, the increase in people seeking two or more jobs due to insufficient earnings, and the global spread of the "gig economy" that hires mainly temporary workers as needed, they decided to focus on cash-based policies for the time being.

At the VentivR site, Deputy Prime Minister Hong said, "The government will make every effort and actively support the significant expansion of new youth employment opportunities along with economic recovery." Minister Ahn also said on site, "The government plans to accelerate the recent recovery trend in youth employment based on stable jobs created through youth job projects such as the special incentive."

The youth employment recovery mentioned by Minister Ahn refers to last month's youth employment rate and number of employed persons. The employment rate was 43.5%, up 2.6 percentage points from April of the previous year, and the number of employed persons increased by 179,000 to 3,832,000.

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