[How Is Your Dream?] "How About a 'Youth Employment Tax' for Companies Neglecting Youth Hiring?"

[Youth Speak①] Im Sang-won, Former Representative of Gangnam Youth Network

Tax Incentives Needed to Overcome Youth Unemployment
Government to Support Employment for 555,000 Youth This Year
Establish Solidarity and Virtuous Cycle Structure Among Supported Youth

[Asia Economy Reporter Kim Bo-kyung] Last year, the employment market froze cold due to the impact of the novel coronavirus disease (COVID-19). In their 30s and working as private academy instructors, who were in the blind spots of the employment insurance system, lost their jobs and faced bleak times, while university students who have not yet stepped into society are increasingly worried about the narrowing job market. This year, as uncertainty in corporate management rises, youth employment difficulties are expected to worsen. According to a survey conducted by the Korea Employers Federation targeting 212 businesses with 30 or more employees nationwide, more than six out of ten responding companies said they would reduce hiring this year compared to last year. In this situation, we looked into what ordinary young people in our society expect from the government regarding job and youth policies.

"I think companies that actively hire young people should be given enhanced social publicity and tax reductions, while youth-excluding companies or black companies should be subject to punitive taxation such as a 'youth employment tax.'"

Im Sang-won (25, pictured), a third-year student in the Department of Economics and Finance at Hanyang University, answered this way when asked about solutions to overcome youth unemployment in an interview with Asia Economy on the 5th. Im served as the representative of the 'Gangnam-gu Youth Network' last year. The Gangnam-gu Youth Network is an organization where young people under 39 who live in or work in the Gangnam area of Seoul gather to directly express opinions on youth policies and discover agendas.

He expressed concern that the youth employment market would freeze again this year following last year due to the prolonged COVID-19 situation. He argued, "Companies that hire a certain percentage or more of interns or employees annually should be given bold tax benefits, and companies that fall short of that standard should be taxed with something like a youth employment tax."

The government is not just standing by either. This year, it plans to provide various employment support services to a total of 555,000 young people through programs such as the Youth Tomorrow Savings and Digital Jobs. Regarding this, Im said, "Support should not be limited to job creation; the government should encourage network activities where supported youth can interact and communicate," emphasizing, "Even after employment support projects end, enabling solidarity among young people to create a virtuous cycle where youth policies contribute to society is important."

According to the National Assembly Legislative Research Office, as of 2019, the higher education attainment rate of Korean youth aged 25-34 was 69.8%, the second highest among OECD countries, but the employment rate was 76%, lower than the OECD average of 85%. Im pointed out, "Universities have become a kind of credential, adjusting curricula and departments to suit corporate tastes," adding, "With such a dependent university order, there is a high risk of losing both employment and academic pursuits." He continued, "While education has been leveled up, the imbalance problem of not connecting with corporate hiring continues," and said, "Through industry-academia exchanges and tax incentives, companies should take responsibility for hiring suitable talent."

Amid the increasingly unstable employment market due to COVID-19, more young people are choosing to become 'public service exam takers.' Public enterprises, government agencies, and civil service jobs are stable positions that young people always prefer. The government is also accelerating efforts to increase hiring in the public sector accordingly. This year, the number of national civil service open recruitment was set at 6,450, an increase of 340 from last year, with plans to fill more than 70% by the third quarter.

Im agreed with the plan to increase civil servant recruitment as part of employment policy but stressed the need for thorough civic oversight of the public sector. He said, "To shed the so-called 'iron rice bowl' stigma, the citizen ombudsman system that continuously monitors and supervises welfare stagnation within the civil service should be activated," adding, "If the monitoring results are properly reflected in personnel evaluations, a healthy civil service organization can be created."