Government Measures Insufficient for Carbon Neutrality-Driven Coal Power and Internal Combustion Vehicle Restructuring... No Target for Attrition Rate

Government Announces 'Fair Labor Transition' Measures on 22nd
No Clear Plans Beyond Job Training Support for 100,000 Workers' Job Transitions

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Moon Chaeseok] The government has announced measures for workers in coal-fired power plants and internal combustion engine vehicles, who are expected to suffer severe restructuring as the industrial structure shifts toward a low-carbon and digital economy, including 2050 carbon neutrality. However, these measures have been criticized as insufficient. Although the government pledged to support job training for 100,000 workers for job transitions, a clear blueprint is not visible. No annual job transition rate targets or scenario-based measures have been presented.

On the 22nd, the government announced the "Fair Labor Transition Support Plan in Response to Industrial Structural Changes." Short-term measures were prepared for industries heavily affected by restructuring, while medium- to long-term measures were set for relatively less affected industries.

Attention is focused on the short-term measures for the coal power and internal combustion vehicle sectors. The core of the government’s plan is to support job training programs for 100,000 workers in these sectors by 2025. A new project called "Industry Structure Response Specialized Training" will be launched and implemented. Training costs for workers will be waived. Additionally, the government plans to benchmark a pilot project in Gyeongsangnam-do Province, where companies provide long-term paid leave to employees for job transition training and receive subsidies for labor and training costs.

The government's "Fair Labor Transition Support Measures in Response to Changes in Industrial Structure" announced on the 22nd does not present any target rate for job transitions. (Data provided by the Ministry of Employment and Labor and related departments)

The problem is that even if these job training policies are implemented, it is uncertain whether workers will definitely be able to "transition" to new jobs. The government’s plan does not include job transition rate targets or scenarios based on achievement speed. The only commitment is to support job training for 100,000 workers within four years. There is no guarantee that job training will necessarily lead to job transitions, and no clear forecast has been provided on this. Considering the already severe labor regulations causing companies to reduce open recruitment of new employees, there are many concerns that "growth without employment" will be prolonged, making it difficult to avoid criticism that the restructuring measures are inadequate.

The "win-win job creation project" and "industrial complex overhaul plan" introduced to reduce employment shocks for internal combustion engine vehicle workers are the same policies emphasized throughout the Moon Jae-in administration. The win-win job creation project supports the transition to future car industries and eco-friendly technology research and development (R&D) in government-selected regions such as Gunsan, Busan, Gwangju, Miryang, and Hoengseong. The industrial complex overhaul plan targets industrial complexes preliminarily selected this year in Gyeonggi, Gyeongsangnam-do, Busan, Ulsan, and Jeonbuk, supporting manufacturing innovation, remodeling, and environmental improvements. These plans are no different from the projects the government launched around the announcement of the Korean New Deal 1.0 policy last year.

These policies have been criticized for merely listing vague contents without guaranteeing feasibility, such as supporting eco-friendly technology development and fostering alternative industries. It is projected that if internal combustion vehicles switch to electric vehicles, the number of required parts will decrease from 25,000?30,000 to about 15,000. Naturally, concerns about mass layoffs of subcontractor workers are growing.

Since specific budgets have not been properly allocated, there are also doubts about how strong the policy momentum can be.

The government's "Fair Labor Transition Support Measures in Response to Changes in Industrial Structure" announced on the 22nd does not present any target rate for job transitions. (Data from the Ministry of Employment and Labor and related departments)