One-off cash benefits cannot pull younger generations out of their mounting difficulties
The government and the ruling Democratic Party of Korea last week put forward a package of measures to expand support for young people who are suffering from economic difficulties exacerbated by the pandemic.
Under what is dubbed the special youth assistance program, which will be put into practice next year, a monthly rent subsidy of 200,000 won ($170) will be paid for up to a year to young adults on low incomes. About 160,000 people are expected to meet the criteria: those aged 19-34 whose income is below 60 percent of the country’s median income.
The number of college students eligible for tuition support will increase from 622,000 this year to about 1 million next year, nearly half of the 2.15 million people registered at universities across the country.
Young people whose annual income is less than 24 million won will receive three times the amount they save annually.
The government will also provide young people suffering from depression amid the prolonged pandemic with 200,000 won over three months to help pay for counseling.
Small and midsize firms will be given a subsidy of 9.6 million won for each young person they hire. Government officials expect this subsidy scheme to help about 140,000 young people land a job.
At their policy consultative meeting last week, officials from the government and the ruling party agreed to set aside more than 20 trillion won to finance the program.
Certainly, it is necessary to strengthen support for young people, who are increasingly frustrated with dwindling job opportunities and soaring rent and housing prices.
But the mostly one-off cash benefits to be offered under the program can hardly be expected to help ease young people’s growing difficulties in a significant way.
Rather, they are seen by opposition lawmakers and other critics as designed to soothe youths’ discontent ahead of the presidential election in March and local elections three months later. Among other things, the planned provision of tuition support to college students from not only low-income but also middle-income households earning up to 9.75 million won per month may well prompt criticism that the Moon administration and the ruling party are seeking to buy votes with taxpayers’ money.
What is more urgently needed is to accelerate regulatory and labor reforms to encourage private companies to increase investment and hire more young job seekers.
Recent data from the state statistics office show those in their 20s and 30s suffer job losses with the total number of waged jobs in the country increasing at a slowing pace.
The number of employed people here reached 18.9 million in the first quarter of this year, up 321,000 from a year earlier, compared with an on-year increase of 503,000 in the fourth quarter of last year. But the figures for employees in their 20s and 30s fell by about 35,000 and 63,000, respectively, from a year earlier during the same period, marking the fifth and sixth consecutive quarter of decline.
Responding to the criticism over the populist content of the youth assistance program, Rep. Park Wan-joo, the ruling party’s chief policymaker, said he wished to hand out even more cash handouts to young people.
His remark just betrays the younger generations’ hope that fundamental and sustainable solutions to their predicament will be worked out by creating more opportunities to land well-paid jobs. It is a mistake to think that young people will be placated by temporary government-funded subsidies and other support programs.
It should also be noted that increased financial support for younger generations will eventually increase the burden to be shouldered by them.
The country’s national debt is projected to reach 1,000 trillion won for the first time next year as a result of reckless fiscal expenditure by President Moon Jae-in’s administration since Moon took office in 2017. The figure means every South Korean citizen will be saddled with 20 million won of debt.
More worryingly, the country’s national debt is set to rise at an accelerating pace down the road amid a rapid aging of its population coupled with a plummeting birthrate.
Aside from the burden of repaying national debt, younger generations would also have to pay more to shore up the national pension system, whose funds are projected to be depleted by 2055 unless reforms to the scheme are undertaken immediately.
By Korea Herald (email@example.com