[2021 National Audit] "One in Four Workplaces Receiving Employment Retention Subsidies Has More Retirees"

Choo Kyung-ho "After Rapidly Raising the Minimum Wage, Only Patchwork Policies Are Being Repeated"

On the 28th of last month, the Seoul Western Employment Welfare Plus Center in Mapo-gu, Seoul./Photo by Jinhyung Kang aymsdream@

[Sejong=Asia Economy Reporter Moon Chaeseok] It has been revealed that one out of every four workplaces receiving Job Stability Funds from the government is dismissing more employees than the number of workers who received the funds.

According to data obtained by Rep. Chu Kyung-ho of the People Power Party from the Ministry of Employment and Labor on the 5th, among 809,491 workplaces that received Job Stability Funds last year, 205,515 workplaces (25.4%) had a number of retirees equal to or greater than the number of fund recipients. This year, up to June, 605,819 workplaces received funds, and among them, 132,728 workplaces (21.9%) had more retirees than fund recipients.

The Job Stability Fund is a government policy implemented since 2018 to mitigate the reduction of private sector jobs by providing a certain amount per worker. This year, workplaces with five or more employees receive up to 50,000 KRW per person per month.

From 2018 to June this year, the total amount of Job Stability Funds provided was approximately 8.353 trillion KRW. The average annual number of recipients was 3,029,689, and the average annual number of recipient workplaces was 709,882. Employers who received the funds are prohibited from dismissing eligible workers for employment adjustment reasons during the payment period.

The problem is that employers can dismiss other workers who are not eligible for the funds. Even if the employment of fund-eligible workers is maintained, if many other workers in the same workplace lose their jobs, it is difficult to say that the goal of employment retention has been effectively achieved. According to Rep. Chu, Company A received 17.99 million KRW in Job Stability Funds for a total of 84 workers, but the company dismissed 56 other workers citing business necessity and recession. Including disciplinary dismissals and voluntary resignations, a total of 227 employees left Company A.

Rep. Chu criticized, "The government is ignoring concerns from the field such as self-employed individuals, recklessly raising the minimum wage and causing mass unemployment, while only issuing patchwork policies."