Among Young Employees, 10% Are in Simple Labor Jobs... High-Paying Positions Held by Experienced Workers

Proportion of Simple Labor Jobs Increased by Over 26% in 4 Years... Analysis of Rigid Employment Policy Impact
Companies Increasing Proportion of Experienced Hires... Youth Face 'Needle's Eye' Job Market
Business Community: "Regulatory Relaxation and Advanced Labor-Management Culture Needed for Job Creation"
Minimal Corporate Deregulation Measures in 'Second Half Economic Policy Direction'

[Sejong=Asia Economy Reporter Moon Chaeseok] The decrease in the number of professionals and office workers among young workers (aged 15-34) and the increase in simple labor workers can ultimately be interpreted as a deterioration in the quality of jobs for this age group. Considering the annual decline in the working-age population, the increase in simple labor jobs leads to an expansion of their share within the total young workforce.

Analysis of the microdata from Statistics Korea's employment trends shows that the proportion of simple labor workers among the average monthly young employed from January to May rose from the 7% range in 2017 to nearly 10% this year.

Job Polarization Due to Increase in Simple Labor Jobs

[Image source=Yonhap News]

Experts point out that the increase in simple jobs among young people, such as cleaning services, construction work, and delivery, reflects a polarization of the job structure. Especially after the COVID-19 pandemic last year, the expansion of the non-face-to-face society led to a boom in jobs like delivery.

The polarization of jobs was influenced by the trend of the 'gig economy,' which is based on short-term contracts, but the rigid employment policies of the Moon Jae-in administration also played a role. The rapid minimum wage hikes and the enforcement of the 52-hour workweek, representative of income-led growth, dampened companies' willingness to hire. Recently, the combination of 'union law amendments' and the promotion of the 'Serious Accident Punishment Act' (which punishes CEOs in case of industrial accident deaths) has further frozen employment, critics say.

Son Kyung-sik, chairman of the Korea Employers Federation (KEF), commented yesterday on Employment and Labor Minister Ahn Kyung-duk's request to "expand open recruitment," saying, "Many companies worry that labor disputes will increase and strikes will rise due to the amended union law," and emphasized, "To create jobs, it is most important to create a business-friendly environment through deregulation, advancement of labor-management relations, and enhancement of labor market flexibility." This indicates that companies see significant risks from government policies.

From the companies' perspective, they inevitably prefer frequent hiring of experienced workers and short-term contracts to assign them to necessary roles rather than creating new jobs. According to the 'Major Company Hiring Trend Survey' recently released by the Korea Employment Information Service, among the 137 companies with hiring plans out of the top 500 companies by sales as of May, 37.6% of second-quarter hires were experienced workers, and 62.4% were new hires. Particularly in IT and research and development, the proportion of experienced hires was 71.4% and 60.2%, respectively. So-called quality jobs are occupied by experienced workers. On the other hand, industries with a high proportion of new hires include sales and marketing (78.2%) and production and technology (62.9%).

Government Still Insists on Cash Support

Deputy Prime Minister for Economy Hong Nam-ki announcing the economic policy direction for the second half of the year at the Government Seoul Office Building on the 28th. (Photo by Yonhap News)

The government has not given up on policies to increase jobs by injecting fiscal funds. According to the 'Second Half Economic Policy Direction' announced on the 29th, the government plans to implement the 'Youth Employment Special Incentive,' which provides up to 9 million KRW per person in labor cost support to small and medium enterprises that hire young people as regular employees, and the 'National Employment Support System,' which offers up to 3 million KRW per person in job-seeking activity support for vulnerable groups including youth. Measures to deregulate companies to activate private employment are minimal.

There are many doubts about whether the youth employment policies announced in the second half economic policy will create synergy with 'housing and asset policies.' Asset accumulation is a long-term policy looking 10 to 20 years ahead after employment, and real estate policies involve too many variables such as education, transportation infrastructure, and price changes due to government policies, making it difficult to guarantee that they will necessarily lead to employment growth.

Professor Sung Tae-yoon of Yonsei University's Department of Economics said, "It is a desirable direction to integrate youth policies into 'employment, housing, and assets' and to set a direction, especially by introducing asset accumulation policies," but he also diagnosed, "Whether these policies will create synergy such as increasing high-income regular employment for youth is another matter." He explained, "Because Korea's labor market is very rigid, it is doubtful whether it will progress from the first stage of increasing employment to the second stage of home ownership (housing) and the third stage of asset accumulation in reality. Especially, the policy's effectiveness is low because there is insufficient incentive to hire young job seekers at small and medium enterprises receiving government financial support when large companies maintain frequent hiring of experienced workers."

Despite expert criticism, the government still ignores the demands of the business community. Regarding the demand for government-level guidelines on union activities of unemployed or dismissed union members (non-working union members) in workplaces, the Ministry of Employment and Labor flatly rejected, saying, "There are no plans to do so."

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