A Lifeline for the Cliff-Edge Aviation and Travel Industry... Employment Retention Subsidy Extended Until the End of October

Government Approves 8th Employment Policy Council Decision... One-Month Extension Planned

On the 6th, as tension over the COVID-19 situation continues with the first domestic case of the Mu variant confirmed, overseas arrivals are seen moving through Terminal 1 arrivals at Incheon International Airport. Photo by Mun Ho-nam munonam@

[Sejong=Asia Economy Reporter Moon Chaeseok] The government has decided to extend the payment period for the Employment Retention Support Fund, which provides 90% of the leave allowance to 15 special employment support industries such as aviation and travel, by one month until the end of next month. This decision increases the payment period, which has continued since last year, from the previous 270 days to 300 days, based on the judgment that the recovery speed of these industries is slower than that of other sectors.

On the 15th, the Ministry of Employment and Labor announced that it held the '8th Employment Policy Deliberation Committee of 2021' in writing over two days from the 14th and deliberated and resolved to extend the payment period by 30 days. The government will provide an additional month of support covering 90% of the leave allowance only to 15 special employment support industries including aviation, travel, shipbuilding, tourism accommodation, and intercity bus services. The leave allowance amounts to 70% of the average wage paid by companies to workers.

The government explained that it extended the payment period because these industries are recovering more slowly than others. According to the Ministry of Employment and Labor, compared to 2019, the production index as of July this year dropped from 121.6 to 18.3 in the travel industry, from 140.5 to 53.8 in aircraft handling, and from 92.8 to 45.4 in intercity bus services. Although the total number of insured employees under employment insurance increased by 313,000 from 14.08 million to 14.393 million by July this year compared to last year, the travel industry decreased by 3,200, intercity bus services by 1,700, and aircraft handling by 300.

An official from the Ministry of Employment and Labor explained, "While vaccination is progressing rapidly and other industries are gradually showing employment recovery, the (15) special employment support industries still face poor employment conditions. Considering concerns from labor and management that employment adjustments may occur once support ends, this measure was taken."

According to the Ministry of Employment and Labor, following last year, as of the end of last month this year, support has been provided to 39,000 workplaces and 295,000 workers (890,000 in total) amounting to 934.9 billion KRW. However, as part of measures to stabilize the employment insurance fund finances, the Ministry of Economy and Finance held the Fiscal Management Strategy Committee at the end of last month and announced that the budget related to support funds, which was 1.3728 trillion KRW in this year's main budget, will be cut in half next year.

Minister of Employment and Labor Ahn Kyung-duk said, "I hope this measure will help stabilize employment for workers in special employment support industries who are still facing great difficulties," and added, "We will continue to monitor the employment situation and seek support measures to do our best with labor and management to overcome the employment crisis."

Employment Retention Subsidy Support System. (Source: Ministry of Employment and Labor)

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