Youth Employment
Minister of Employment and Labor Lee Ki-kwon said on May 6 that private sector companies need to help address youth unemployment by including a wage peak in their wage negotiations scheduled for this month and June. “The problem is much more serious than statistics show, and the government is seeking measures on its part as well,” he mentioned, adding, “With only 9.9 percent of private-sector businesses adopting a wage peak now, new employment is likely to shrink once the retirement age extension is put into force.”
Yonsei University professor Lee Ji-man echoed his opinion by saying that 87,900 to 133,000 new jobs are expected to be created between 2016 and 2019 if 100 percent of companies adopt a wage peak during the period.
“We can create up to 210,000 new jobs for the young generation on the condition that the rate of the wage increase is cut by 3 percent in the group of the top 10 percent of earners,” Korea Labor Institute Senior Researcher Ahn Joo-yeop explained, continuing, “Financial resources amounting to 1.189 trillion won [US$1.093 billion] become available when those in the group concede only 1 percent of their annual wages.”
According to the ministry, the top 10 percent of earners’ average annual salary is 88.26 million won (US$81,170), and their total pay accounts for 28.1 percent, 119 trillion won (US$109 billion) to be specific, of the salary of all employees. The average is 21.81 million won (US$20,058) for those workers with a career of two years of less. This means 151,000 to 218,000 new jobs can be created for career beginners if a wage peak system is adopted.