Direct Jobs Funded with 3 Trillion Won in Taxes, Only 4 out of 10 Maintain Employment

38% Last Year... 13.5%P Decrease from 2019
Jobs Fail to Serve Their Purpose as Government Support Ends

[Sejong=Asia Economy Reporter Moon Chaeseok] It has been revealed that the employment retention rate of direct jobs created by the government significantly declined last year. The employment retention rate measures the proportion of government-funded jobs that continue into private sector employment after the support ends, indicating that once the support was cut off, these jobs no longer functioned as employment opportunities. This is the result of the government focusing solely on creating jobs regardless of market demand.

According to the "Efficiency Improvement Plan for Fiscal Support Job Projects" reported by the Ministry of Employment and Labor to the Cabinet meeting on the 8th, the employment retention rate for government direct job projects last year was 37.8%, a drop of 13.5 percentage points compared to the previous year. This means that out of 10 people, fewer than 4 maintained their jobs last year, down from 5 in 2019. This is the lowest figure since the government began evaluating fiscal support job projects, including direct jobs, annually in 2018.

The decline in the employment retention rate is due to the government focusing on job creation through fiscal spending last year, while the private sector's capacity to create jobs weakened. A Ministry of Employment and Labor official said, "The employment retention rate is an indicator that assesses how many people properly enter the labor market after government support ends," adding, "This ultimately means that the structural improvement of South Korea's employment market is slowing down."

Until now, the government has emphasized creating direct jobs funded by fiscal resources. The number of participants in direct job projects increased significantly from 814,000 in 2018 to 970,000 last year. Professor Yoon Dong-yeol of Konkuk University's Department of Business Administration pointed out, "The government needs to consider whether it has effectively created quality jobs through fiscal job projects."

The Ministry of Employment and Labor plans to strengthen the transition of participants in the National Employment Support System and direct job projects into the private sector by introducing a new indicator, the "training and employment support linkage rate," in the performance evaluation of job projects and reflecting it in the institutional evaluation of employment service agencies.

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