Government Plans to Increase Jobs for People in Their 40s Through 'Incentives' and 'Startup Support' (Comprehensive)

Job Committee to Announce 'Second Half Job Policy Directions' on 9th
Support for 20,000 Middle-Aged Workers under Chwiseongpae... Employer Incentives Provided
3 Million Won Job-Seeking Promotion Allowance for Low-Income Job Seekers in Their 40s

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] From now on, 3 million won will be provided to low-income job seekers in their 40s and self-employed individuals who have closed their businesses. In addition, financial support will be given to middle-aged people aged 40 and over when they start a business. In the fourth quarter of this year, plans will be made to introduce a new senior employment model.

The Presidential Committee on Jobs held its 14th meeting at the Korea Press Center on the morning of the 9th and announced that it had submitted and approved the "Job Policy Direction for the Second Half of the Moon Jae-in Administration," which includes these contents. On this day, the government set a goal to raise the employment rate to 68% and achieve 15 million employment insurance subscribers by 2022.

The job policy direction for the second half includes the "40s Employment Vitalization Plan," which consists of ▲ resolving job mismatches ▲ expanding employment and labor incentives ▲ measures to revitalize startups. After President Moon Jae-in instructed the 40s job measures, the government formed a task force (TF) to refine the policy direction and plans to announce the final plan within this month.

According to what the Committee on Jobs disclosed that day, the 40s employment measures are filled with various cash support measures such as employment promotion incentives and job-seeking promotion allowances.

First, to allow job seekers in their 40s to also utilize the Employment Success Package project, the government decided to expand the support target for middle-aged people in Employment Success Package II by 20,000 this year. Employers who hire middle-aged people who have completed Employment Success Package II will receive employment promotion incentives. There is also a plan to provide job-seeking promotion allowances of 500,000 won per month for up to six months to low-income job seekers in their 40s and small self-employed individuals who have closed their businesses, linked with the National Employment Support System. The government plans to implement the National Employment Support System starting in July, but the law that serves as the basis for the system is currently pending in the National Assembly.

Furthermore, the government decided to expand the target of the Preliminary Startup Package, which supports startup business funds, to all ages including middle-aged people aged 40 and over. The "Startup Company Support Service Voucher," a support project exclusively for young startup companies under 39, will also be expanded to startup companies in their 40s. Through a pilot project this year, 1,800 companies will be supported. In addition, measures will be prepared to help retired people in their 40s with professional experience engage in the startup ecosystem activities such as technology startups, professional mentoring, and employment of venture executives and employees.

However, due to the impact of COVID-19, the employment slump among people in their 40s is expected to accelerate further, and these startup support and incentive expansion measures cannot avoid criticism for lacking practicality and sustainability. Concrete alternatives to the collapse of traditional industries such as manufacturing and construction, which are the main causes of the 40s employment disaster, were not presented on this day.

Professor Sung Tae-yoon of Yonsei University said, "The main fundamental cause of the worsening employment situation for people in their 40s is the slump in manufacturing and economic downturn," adding, "It is necessary to improve the rigid manufacturing labor market and establish a wage system that reflects productivity relative to cost." He continued, "Support measures for unemployment in the 40s are also necessary, but they are not sustainable and worsen the national fiscal situation," and added, "It is important to create conditions for companies to operate domestically."

Meanwhile, the Committee on Jobs plans to announce measures to expand the social utilization of retired senior workers with expertise in the second quarter of this year. In addition, within this year, it will sequentially release plans to strengthen public employment services, activate employment for high school graduates (first half), expand social service jobs (third quarter), and introduce a new senior employment model (fourth quarter).

Through this, the Committee on Jobs aims to raise the employment rate of the working-age population aged 15 to 64 to 68.0% by 2022. This is 1.2 percentage points higher than last year's employment rate (66.8%). The number of employment insurance subscribers, a representative employment safety net, will be increased from 13.67 million last year to 15 million in 2022.