Geoje Designated as 'Employment Crisis Area'... Extension of 'Special Employment Support' for Intercity Buses and More

Serious Job Losses in Geoje, Designated as Employment Crisis Area
Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries Report Losses for 7 Consecutive Quarters
200 Billion Won Project Launched to Revive Shipbuilding Industry Conditions

The government will implement a specialized project worth 20 billion KRW to revive the shipbuilding industry, which is facing severe labor shortages, and designate Geoje City, home to Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries, as an 'employment crisis area.' Additionally, the government plans to extend the period for special employment support sectors such as intercity buses and foreigner-only casinos, which are still struggling after the COVID-19 pandemic, significantly reducing the burden on business owners and workers.

Employees are entering through the west gate of Daewoo Shipbuilding & Marine Engineering Okpo Shipyard in Aju-dong, Geoje-si, Gyeongnam [Image source=Yonhap News]

On the 19th, the Ministry of Employment and Labor held a 'Joint Meeting to Overcome the Employment Crisis in Geoje Region' at the Daewoo Shipbuilding & Marine Engineering shipyard in Geoje, Gyeongnam, and announced that Geoje City was designated as an employment crisis area for next year through the 5th Employment Policy Council held from the 14th to the 16th. Minister Lee Jeong-sik of the Ministry of Employment and Labor said at the meeting, "We hope that the labor shortage in the shipbuilding industry will be resolved and that the economy and labor market in Geoje will change vibrantly."

According to the Ministry of Employment and Labor, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries, which account for a large portion of jobs in Geoje City, have recorded operating losses for seven consecutive quarters through the third quarter of this year, and are facing difficulties such as cancellations of ship orders due to the prolonged Russia-Ukraine war. As a result, Geoje City has experienced a serious job decline, with the average number of employment insurance subscribers decreasing by more than 5.31% compared to the previous year over the past year.

When designated as an employment crisis area, business owners can receive employment maintenance subsidies for paid leave and suspension pay up to 90% of paid leave and suspension allowances, and receive support such as deferral of employment and industrial accident insurance premium delinquency disposition, exemption from delinquency interest, and expansion of business owner training support limits. Workers are entitled to benefits such as a maximum 8-year repayment period for livelihood stabilization funds, 7 million KRW for children's tuition, a maximum loan limit of 20 million KRW for vocational training living expenses, and increased support amounts for the National Tomorrow Learning Card.

To address the worsening labor shortage in the shipbuilding industry, the government also announced the '2023 Shipbuilding Industry Labor Shortage Support Project' plan on the same day. First, the government will promote a 'Shipbuilding Industry Labor Shortage Specialized Project' worth 20 billion KRW next year. The age limit for the newly established 'Shipbuilding Industry Tomorrow Savings Deduction' this year will be abolished to allow more workers to receive support, and new support funds such as workplace settlement support for new entrants and reemployment support for skilled retirees will be introduced.

The 'Shipbuilding Industry Hope Center,' which has played a role in supporting job changes and transfers for workers leaving the shipbuilding industry, will shift its role to support labor shortages, and one additional center will be established in the Jeonnam region to support all shipbuilding industry clusters nationwide. Next year, a 'Shipbuilding Industry Employment Support Hub' will be newly established to prioritize support for the shipbuilding industry's manpower shortage, and vocational training for on-site workforce development will be strengthened. In particular, the government will exempt late payment fees and defer delinquency disposition for employment and industrial accident insurance premiums imposed on shipbuilding subcontractors from January to June next year to support a smooth transition.

In addition, the government decided to extend the designation period of special employment support sectors for three industries?intercity buses, foreigner-only casinos, and taxi transportation?that were scheduled to end on December 31 this year, by six months from January 1 to June 30 next year. These industries have experienced delayed recovery in employment and business conditions due to delayed recovery of Chinese and Japanese tourists and insufficient restoration of reduced routes, even after COVID-19 related quarantine regulations were lifted.

The number of employment insurance subscribers, which had decreased due to the COVID-19 pandemic, continued to decline this year, decreasing by 7.4% to 13.1% across industries, and intercity buses saw sales shrink by up to 60% compared to before COVID-19. The Ministry of Employment and Labor explained, "We plan to finalize the specific designation scope and support details by revising and promulgating the employment crisis area and special employment support sector designation notices within this month."

Daewoo Shipbuilding & Marine Engineering Okpo Shipyard, Aju-dong, Geoje-si, Gyeongnam [Image source=Yonhap News]