Comprehensive Support for Youth Jobs, Housing, and Assets... Creating 500,000 New Jobs by Next Year

Government Announces '2021 Second Half Economic Policy Directions'
Vaccine Response and Job Support via 2nd Supplementary Budget
Employment Expected to Increase by 500,000 (250,000 Each in 2021 and 2022)
July Launch of 'Youth Hope Ladder'... Comprehensive Support for Jobs, Housing, and Assets
Next Year's Budget Focused on Low Birthrate Measures Including Parental Leave for Couples

[Sejong=Asia Economy Reporter Moon Chaeseok] The government will actively invest fiscal resources to respond to vaccines and quarantine measures, as well as support jobs and vulnerable groups. In particular, to rekindle employment recovery, it will strengthen 'package support' related to youth job seeking, home ownership, and asset formation. Measures to overcome low birth rates, such as parental leave for couples, will be prepared and significantly reflected in next year's budget. Through these support measures, the government plans to create 500,000 new jobs by next year and grow the employment market beyond the pre-COVID-19 crisis level.

On the 28th, the Ministry of Economy and Finance announced the '2021 Second Half Economic Policy Direction,' which includes measures for employment market recovery and population response. Through the supplementary budget, vaccines will be swiftly secured to revive the economy, and job-seeking promotion allowances such as the National Employment Support System will be strengthened to increase youth employment. Furthermore, expansion of rental housing near transit stations for youth, extension of preferential interest savings account subscription periods, and customized asset formation support by income level will be promoted.

Supplementary Budget to Introduce 192 Million Vaccine Doses This Year

[Image source=Yonhap News]

The government set 'complete economic recovery' and 'economic structural transformation' as the economic policy goals for the second half of the year. To achieve economic recovery, it prepared the 'COVID-19 Overcome Coexistence 3-Pack' including COVID-19 coexistence national support funds, small business damage support, and coexistence consumption support using this year's expected excess tax revenue. A second supplementary budget will be organized to respond to vaccines and support jobs.

Specifically, by investing the supplementary budget, 192 million doses of vaccines will be introduced this year, and the number of public vaccination centers will increase from 267 to 282. This will enable a smooth transition to a new social distancing system with eased quarantine levels starting next month. Additionally, the government will establish the 'K-Global Vaccine Hub Construction Strategy' to support domestic vaccine development and other initiatives.

Employment Recovery to Pre-COVID-19 Levels This Year, Growth Next Year... Strengthening Youth Job Support

To support vulnerable employment groups such as youth, the government plans to relax the eligibility criteria for the job-seeking promotion allowance under the National Employment Support System, which provides up to 3 million KRW per person, and strengthen the special youth employment incentive.

For the National Employment Support System, the asset limit for eligibility will be raised from 300 million KRW to 400 million KRW. Previously, applicants needed to have less than 100 days (or 800 hours) of employment experience within two years prior to support to receive the allowance, but going forward, employment experience will no longer be considered.

Furthermore, starting next month, companies hiring youth aged 15 to 34 as regular employees will receive up to 9 million KRW per person as a 'Special Youth Employment Incentive' to promote new job creation.

Economic Outlook for 2021~2022. (Source: Ministry of Economy and Finance)

Through this, the government expects employment to increase by 250,000 people each in this year and next year. If the government's forecast holds, the 220,000 decrease from last year will be recovered within this year, and the employment market will grow significantly next year.

Support for Youth Home Ownership and Seed Money... 'Hope Ladder' Measures to be Announced in July

The government has announced a 'package support' plan for youth employment, home ownership, and asset accumulation. This stems from a sense of crisis that youth might remain a vulnerable group rather than becoming the growth momentum of the economy.

Among housing support measures, it is notable that an additional 5,000 jeonse rental houses will be supplied mainly around university areas and transit stations through the supplementary budget in the second half of the year. The subscription period for the 'Youth Preferential Savings Account,' which offers a 1.5 percentage point interest rate discount, will be extended from the end of this year to the end of 2023, and the income eligibility will be expanded from 30 million KRW to 36 million KRW annually. Interest-free loans of 200,000 KRW per month will be provided to non-homeowning youth living in monthly rent.

A 'Strong Youth Hope Ladder' plan including asset formation support will be announced next month. Income levels will be divided into three stages: ▲ government support at a certain ratio relative to savings (Stage 1) ▲ government additional support on top of market interest (Stage 2) ▲ introduction of products with income deduction benefits (Stage 3), providing stepwise support. A Ministry of Economy and Finance official explained, "We considered jobs, housing, and asset formation comprehensively. Especially for asset formation, we prepared with great care by comprehensively judging the recent economic situation."

Full Effort on Population Measures Including Expansion of Parental Leave for Couples

From 2019, the government has announced annual population measures such as 'continued employment of the elderly → prevention of career interruption for women → response to university and regional extinction.' This time, it plans to concretize support measures for the '5 Core Packages to Overcome Low Birth Rates,' including activation of parental leave for couples, and reflect them intensively in next year's budget.

Support of up to 3 million KRW will be provided for couples taking parental leave together. An infant allowance of 300,000 KRW will be newly introduced next year and gradually increased to 500,000 KRW by 2025.

Additionally, measures include ▲ a 'congratulation package' worth 2 million KRW upon newborn birth ▲ achieving a 50% public childcare utilization rate by 2050 ▲ full tuition support for the third child and beyond in families with three or more children.

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