[Exclusive] 2nd Emergency Disaster Relief Fund, Unemployed Youth to Receive '500,000 Won Lump Sum'

50,000 KRW Provided to Unemployed Youth Below 120% of Median Income
Youth Job-Seeking Activity Support Fund Can Be Received Concurrently

Job seekers visiting the 'Startup Job Fair' held on the 14th at Yonsei University in Seodaemun-gu, Seoul, are looking at the recruitment bulletin board. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Jang Sehee] The government has decided to provide a one-time payment of 500,000 won per person to unemployed youth. However, considering limited resources, the target is restricted to unemployed youth with a median income of 120% or less.

On the 8th, a key official from the ruling party and government said, "We plan to provide a one-time payment of 500,000 won to young people who face difficulties in job seeking," adding, "Since we cannot give it to all youth aged 18 to 34, it will be given to those with a median income of 120% or less (5,699,000 won per month for a family of four)."

The ruling party and government set this criterion considering limited resources and the unclear confirmation whether the unemployment status is due to the novel coronavirus infection (COVID-19). For self-employed and small business owners, the sharp decline in sales due to COVID-19 is clear, but it is very difficult to identify the correlation between employment status and pre- and post-COVID situations. It is estimated that about 100,000 unemployed youth from households with median income 120% or less fall under this category. Providing 500,000 won to each would require about 50 billion won in resources.

The issue is that those receiving the Youth Job-Seeking Activity Support Fund can also receive the second disaster relief fund (Youth Job-Seeking Activity Fund) simultaneously.

The current Youth Job-Seeking Activity Support Fund, implemented by the government, provides 500,000 won monthly for six months to unemployed youth aged 18 to 34 who graduated or dropped out within two years and whose median income is 120% or less. Youth already receiving this support will effectively receive an additional month of payment.

Some critics argue that one-time cash payments have weak linkage to job-seeking activities and may be used simply as living expenses. According to the Ministry of Employment and Labor’s October last year report on the "Evaluation and Monitoring of the Youth Job-Seeking Activity Support Fund," the most frequent spending categories by participants were food expenses (582,983 times), retail distribution (479,878 times), online purchases (230,672 times), and transportation costs (55,803 times).

Professor Yang Junmo of Yonsei University’s Department of Economics pointed out, "If one-time cash support is given based solely on income without distinguishing between whether the person was resting or not, it will ultimately increase the tax burden," adding, "One-time cash payments may prolong unemployment and cause side effects of raising the unemployment rate."

Professor Sung Taeyoon of Yonsei University’s Department of Economics also said, "Youth job-seeking support should be linked with education and training," emphasizing, "Only then is there a possibility of effectiveness without excessive fiscal spending."

Meanwhile, the government plans to promote this measure as a pilot project of the National Employment Support System to be implemented from next year. A budget of 828.6 billion won has already been allocated for the National Employment Support System starting in January next year.