New jobs are being added as the nation’s economy gains momentum. Last month, the number of people with a job was at 23,336,000, up 469,000 from a year ago. It was the largest monthly gain since July last year. But the government has a long way to go before the jobless rate falls to a tolerable level.
According to a report from Statistics Korea, the employment rate, as a percentage of the working population (ages 15 to 64), gained 0.5 percentage point to reach 57.1 percent in February. The jobless rate dropped to 4.5 percent by 0.4 percentage point from a year ago.
It is too early to determine whether or not job creation will continue to rise in the months ahead. The monthly employment rates, when seasonally adjusted, have had ups and downs, instead of maintaining an upward curve. The job market may run out of steam when the administration makes a major change in policy as it plans.
Yet the February gain in job openings should be a vindication for President Lee Myung-bak’s administration, which had been accused of pursuing growth-first and business-friendly policies at the expense of price stability and welfare benefits for the underprivileged before it recently said it would change course.
Another notable development is a substantial decline in the jobless rate for youths ― those aged 15 to 29. The February figure stood at 8.5 percent, down 1.5 percentage points from a year ago.
Though the drop in the rate should be welcomed, few would say joblessness was at a tolerable level. On the contrary, it remains stubbornly high, although the administration has repeatedly promised to fight youth unemployment.
As the finance minister put it in December, much needs to be done to raise youth employment. If creating jobs for young people was one of the core issues the administration had to grapple with three months ago, it still remains one.
In his view, a major cause of the problem is a mismatch between demand and supply. In other words, universities send out so many graduates each year, but not many are trained so well that they can be immediately hired by corporations.
Another problem is that the number of jobs coveted by college graduates ― those available at government-funded agencies, government-owned corporations and large businesses ― is declining at a time when more than 80 percent of high school graduates enter higher education each year. As a result, the number of people fresh out of college increased from 330,000 in 1995 to 560,000 in 2008. During the same period, the number of employees at public organizations and large private businesses declined from 4,127,000 to 3,724,000.
In addressing this mismatch in demand and supply, the administration has repeatedly promised to encourage universities to make drastic cuts in admissions. It has also promised to provide incentives for students enrolled at vocational high schools and those admitted to two-year colleges ― a measure that aims to relieve small and medium-size enterprises of a chronic manpower shortage. But little progress has been reported.
Prior to making a shift in policy from growth to price stability, the administration is well advised to review its employment policy carefully and determine what additional action it needs to take to create more jobs for young people. It should give top priority to this issue as it has repeatedly promised.
For their part, college graduates may aim low and think big when jobs are not easily available. It will do little harm if they begin their careers at a small or medium-sized company and seek jobs with large corporations later. Or they may choose to launch a venture from scratch if they have a viable business idea.
