SEJONG -- The government on Thursday unveiled a set of measures, including bolder financial and tax incentives, to tackle the chronic unemployment of young people with the aim of stabilizing the country's youth jobless rate at the 8 percent range by 2021.
The measures center around extending direct financial and tax incentives to young jobseekers. The measures also include broader support to startups launched by young people, according to the finance ministry.
Under the measures, 9 million won ($8,400) will be directly given to every new regular worker at smaller firms every year, which the ministry says is equivalent to a third of an annual salary for a full-time employee at large firms. The financial support will be temporary lasting for three years, it added.
The allowance is aimed at narrowing wage discrepancy between large and smaller companies, which have been cited as a key reason that young jobseekers are hesitant about starting their careers in smaller firms, according to the ministry. Many who start off their careers at smaller firms eventually quit in the first couple of years.
Jobseekers wait in a long line to enter a job fair, organized by foreign companies stationed in the country, at a convention center in Seoul on Oct. 12, 2017. (Yonhap)
Also, a new regular worker will be exempted from income taxation for five years, and low-cost loans will be extended to young workers at smaller firms to help them cover part of residential costs, the ministry said.
The government also plans to increase hiring by public firms to some 28,000 from its earlier planned 23,000, to help raise the employment of young people.
The measures also include loans to startups, as well as tax incentives, for five years.
The ministry said the country's youth unemployment has been deepening since the 1990s, and the gap between the headline jobless rate and the youth jobless rate also has been widening.
It said the nation's deepening youth unemployment has been accelerating due to structural changes in the industrial, educational and labor sectors, and less demand for new workers has been the cause for it.
Finance Minister Kim Dong-yeon said earlier the government may consider creating an extra budget, vowing to mobilize all the tools at its disposal to create more quality jobs.
The ministry said it will accelerate its move to form an extra budget, seeking to finalize it by the end of April.
In January, President Moon Jae-in called for an all-out effort to create new quality jobs for young people and said the country's high youth jobless rate is a national disaster.
Creating quality jobs, especially for the young, was one of Moon's key election pledges. The president has promised to add 810,000 new jobs in the public sector during his single five-year term, which ends in May 2022.
Moon has had several display panels installed in his office to provide daily data on the country's jobless rate and other job-related developments.
As of the end of December, the unemployment rate for people between 15 and 29 years of age came to 9.2 percent, nearly three times higher than the national jobless rate of 3.3 percent. (Yonhap)