Support for Job Transition of 100,000 Workers in Coal Power and Internal Combustion Vehicles by 2025... Mitigating Employment Shock

Need for Restructuring Measures Amid Low-Carbon and Digital Industrial Structural Changes... Strengthening Training in New Technologies

[Sejong=Asia Economy Reporter Moon Chaeseok] The government has decided to support job training for workers in the internal combustion engine automobile and coal-fired power generation sectors, where workforce reductions are expected due to restructuring amid the shift of the domestic industrial structure toward low-carbon and digital industries. This measure aims to mitigate the inevitable employment shocks, such as mass unemployment, caused by industrial structural changes.

On the 22nd, the government announced the "Fair Labor Transition Support Plan in Response to Industrial Structural Changes," which includes these details. The plan is designed to minimize the impact on the labor market during the business restructuring process toward a low-carbon and digital economy.

Short-term Measures to Address Restructuring in Internal Combustion Engine Vehicles and Coal Power... Establishment of Worker Training Programs

[Image source=Reuters Yonhap News]

First, since workforce adjustments are imminent in the automobile and coal power sectors due to the expansion of new car production such as hydrogen and electric vehicles and the closure of coal-fired power plants, short-term measures are deemed necessary. Industries such as steel, petrochemicals, cement, refining, semiconductors, and displays will also inevitably undergo changes in the mid to long term, as they need to improve raw materials and processes to reduce carbon emissions. Additionally, the digitalization of the economy is expected to affect all industries.

The government plans to establish a new "Industry Structure Response Specialized Training" program to support 100,000 workers in the internal combustion engine vehicle and coal power sectors to transition to jobs in new industries by 2025. The core of this program is to open training courses based on surveys of current employees' needs and exempt workers from training costs. The "Long-term Paid Leave Training" program, currently piloted by Gyeongsangnam-do, will also be expanded to other regions to support 40,000 people by 2025. This program provides companies with subsidies for wages and training costs when they grant long-term paid leave to employees for job transition training.

Furthermore, if large corporations provide training infrastructure for workers at partner companies, the government will raise the support limit from 2 billion KRW to 3.9 billion KRW. If companies sign labor-management agreements to maintain employment and facilitate job transitions, related costs such as training facilities will be supported. In cases where workforce reductions are unavoidable, companies will receive incentives such as wage subsidies to allow workers preparing for job changes to reduce working hours. For those changing jobs, customized training programs and low-interest (1% per annum) living expense loans will be provided to support reemployment. To prevent employment crises in regions concentrated with internal combustion engine vehicle and coal power companies, the government will also promote the attraction of companies in new car and renewable energy sectors through win-win job models and large-scale industrial complex renovations.

Mid- to Long-term Measures for Steel, Refining, etc... Strengthening Training in New Technologies like AI and Big Data

For industries such as steel, refining, and cement, where labor market changes are expected in the mid to long term, the government will establish a "Labor Transition Analysis Center" at the Korea Employment Information Service to conduct continuous monitoring by industry. If signs of job reduction are detected, support systems will be activated. Consulting will also be provided through the "Green Enterprise Innovation Support Center" for companies pursuing low-carbon transitions.

Measures to mitigate employment shocks caused by digital transformation across all industries will also be promoted. A "one-stop" support system will be established to assist companies providing training in new technology fields such as artificial intelligence (AI) and big data to current employees, covering everything from training course design to training cost support. When companies offer remote beginner to intermediate digital training to employees, up to 90% of training costs will be subsidized. The target is 4 million people by 2025.

Additionally, to enhance lifelong vocational skills for all citizens, the government will prepare the "National Lifelong Vocational Skills Development Act," which expands the scope of vocational skills development projects. Digital competency training will also be included in the government's vocational training program, the National Tomorrow Learning Card. A "Proactive Corporate and Labor Transition Support Group" will be formed this year through joint efforts of related ministries to identify demand and build infrastructure. Full-scale support will begin in January next year.

Social Dialogue Challenges with Non-regular and Platform Workers

[Image source=Yonhap News]

The government plans to promote the enactment of the "Fair Labor Transition Support Act in Response to Industrial Structural Changes" to stably support the shift toward a low-carbon and digital-centered industrial structure.

However, the support measures announced on this day are criticized as insufficient to address the massive industrial structural changes. Labor groups especially emphasize the need for measures addressing the potential rapid increase in precarious workers, such as non-regular and platform workers, due to industrial structural changes.

Concerns are also raised about the significant impact on small and medium-sized partner companies. For example, in the automobile industry, while there are 126,000 workers at finished car manufacturers, partner company workers number 220,000. Accordingly, labor groups are calling for broad social dialogue frameworks that include not only workers but also partner companies.

The government plans to initiate discussions this year through the Economic, Social and Labor Council (ESLC), a presidential social dialogue body. The formation of sector-specific committees for industries such as automobiles and coal-fired power generation is also under consideration.

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