[Free Speech] Young People Want Stable Jobs, Not Short-Term Work

Young people are suffering from a severe employment crisis. Since last November, the number of employed people has continued to decline, resulting in the worst and longest job shortage on record. In February this year, the number of employed people stood at 26 million, down by 470,000 from the same month last year. Following the 16 consecutive months of decline during the foreign exchange crisis, this was the longest such period, and the number of unemployed also increased by 410,000 as of January, reaching 1.5 million—the highest since the statistics were revised in June 1999. This employment crisis has affected both large corporations and small and medium-sized enterprises alike. According to Statistics Korea and the Korea SMEs and Startups Institute on February 16, the number of employed people nationwide in January this year fell by nearly 1 million from a year earlier, and more specifically, employment at SMEs decreased by nearly 2 million.

What has accelerated this employment crisis? Various causes have been suggested, but economic growth accounts for the largest share. As of 2020, South Korea’s economic growth rate was -1% year-on-year, meaning the economy did not grow but instead contracted. What should be noted here is that this is not merely a temporary downturn caused by COVID-19, but a prolonged downward trend in growth. Economic growth had already been continuously declining since 2011, and even before the outbreak of COVID-19, growth in 2019 was a low 2% compared to the previous year. In other words, South Korea’s low-growth trend is not a temporary phenomenon caused by COVID-19, but a structural and foreseeable outcome.

It has been estimated that as the unemployment rate in the year of graduation rises, the annual wages of those who find employment fall. As the employment crisis has worsened, concerns over such wage losses have become reality. According to data analysis, last year’s unemployment rate rose to 4%, above the historical average, and the starting annual salary of recent university graduates who found jobs is estimated to have declined by about 2%. Wage losses must be taken seriously. Workers fulfill an obligation—labor—and acquire a right—wages. If that right is reduced, the obligation should also decrease accordingly. But instead, while rights are shrinking, obligations are not; rather, they are increasing. This is a deeply flawed situation, and if it continues, the employment crisis will not be resolved but will only worsen.

One of the current administration’s signature youth employment pledges, “expanding public-sector jobs,” is failing to solve the employment crisis. The government claims that jobs have increased, but this claim contains a major flaw. The increase has been in short-hour jobs, not long-term employment. Statistically, it may appear that job growth has reduced the employment crisis, but this is merely covering the sky with one’s palm. Unless the root causes are addressed, South Korea will not escape this employment crisis. Young people do not want short-term jobs created by the government; they want stable workplaces over the long term. We need to give businesses room to breathe and demand proper jobs for young people in their 20s and 30s, whose economic activity will expand in the years ahead.

Although COVID-19 vaccinations have begun, it is difficult to predict whether herd immunity will take hold and whether economic activity will return to normal. The government continues to pour tax money into creating state-directed short-term jobs in an attempt to prop up the sinking labor market, but the limits of this approach are plainly visible. At root, the main source of the crisis is the loss of business vitality and the weakening of firms’ capacity to hire—the very firms that should be leading job creation. There is no solution other than changing the anti-business policy stance that is tying businesses’ hands and feet and drastically abolishing regulations. Unless this obstacle is removed, no employment recovery can be expected even after COVID.

What young people need is not stopgap jobs, but long-term, stable employment. To achieve this, business policy and regulation must be reformed in a market-friendly direction.

Dongwoo Nam, Intern Researcher, Center for Free Enterprise (CFE)

---

Original title: [자유발언대] 청년들은 단기 일자리 대신 안정적 일터를 원한다

Author: Dong-woo Nam

Date: 2021-04-09

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=11&idx=23612