Government Urgently Extends Public Institution Mandatory Employment System for Youth Employment by 2 Years...Effectiveness Questioned Due to Lack of Sanction Regulations

Resolution at the Cabinet Meeting on the 17th
Youth Employment Rate at 5.9%... Additional Measures Insufficient

Amid the prolonged COVID-19 crisis and ongoing job search difficulties, a student is moving to the library at a university in Seoul. Photo by Jinhyung Kang aymsdream@

[Sejong=Asia Economy Reporter Moon Chaeseok] The government has decided to extend the deadline for the mandatory employment system requiring public institutions to employ 3% youth workers by two years. With the employment rate remaining below 6%, and no new disciplinary provisions introduced for violating institutions, debates over the system's effectiveness are expected to continue.

On the 17th, the government announced that it reviewed and approved a partial amendment to the "Special Act on Youth Employment Promotion," which includes extending the validity period of the mandatory employment system for youth aged 15 to 34 in public institutions and local public enterprises until the end of 2023. The bill will be submitted to the National Assembly within this month and is scheduled to be enforced from the date of promulgation after the Assembly's approval. The applicable targets include public enterprises, quasi-governmental agencies, other public institutions with 30 or more employees, and local public enterprises subject to the "Local Public Enterprises Act" with 30 or more employees, such as local corporations and local public corporations.

Despite ongoing debates about the system's effectiveness due to the low youth hiring rate, the government has not presented any special measures other than extending the sunset clause. According to the Ministry of Employment and Labor's announcement in March, the youth new employment rate rose from 5.9% in 2017 to 6.9% in 2018 and 7.4% in 2019, but fell back to 5.9% last year, returning to the level seen at the beginning of the Moon Jae-in administration. Although there have been consistent criticisms that the government should not only urge public institutions to comply but also refine sanction regulations for non-compliant institutions, no sanction provisions were included in this resolution.

In the private sector, a new legal provision was introduced allowing the Minister of Employment and Labor to select companies with good performance as "Youth-Friendly Small Giants" (Gangso Companies). As of this year, there are 1,222 such companies. These companies hired 14,830 youth aged 34 or younger, accounting for 68.8% of the 21,654 new hires. Gangso Companies consist of businesses eligible for priority support under the Employment Insurance Act, including those with fewer than 500 regular employees (manufacturing), fewer than 300 (construction, mining, transportation, warehousing, telecommunications), and fewer than 100 (other industries).

A clause was also added allowing companies meeting criteria set by the minister to be included as Gangso Companies. The minister's notification will select Gangso Companies based on youth employment performance, wage levels, work-life balance, and employment stability. However, considering that more than half (672 companies, 55%) of the current 1,222 Gangso Companies have workplaces with 50 or fewer employees, it is expected to be challenging to find companies with improved youth employment performance.

The government also approved expanding the providers of youth workplace experience opportunities from the national government to local governments. A government official stated, "Through legal amendments, we plan to strive to continuously create quality youth jobs in both the public and private sectors despite the COVID-19 crisis."

An official from the Ministry of Employment and Labor explained, "We consider the youth employment rate in the 5% range not to be a poor performance compared to the target of 3%. Regarding sanctions, we annually announce non-compliant institutions at the beginning of each year and conduct inspection meetings with institutions and report to the National Assembly."

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