[Contribution] Toward a fairer society with more reliable employment safety nets

Squid Game, the television series at the forefront of the Korean wave, has won worldwide praise for its ingenious plot. Even more intriguing was the decision that the lead character made while building a team for a deadly, high-stakes game. After much pondering, he chose to partner with elderly people and women, those in socially vulnerable groups who would benefit the most from the cash prize. The responsibility for protecting vulnerable groups, however, should fall on society as a whole rather than individuals forced to put their lives on the line. The protagonist would have been spared the need to make a fateful decision if he had access to a robust social safety net. Creating support schemes in the labor market would enable us to offer such protection.

An employment safety net is part of a broader support system meant to guarantee a minimum level of financial security and provide job-seekers with financial assistance and employment services to help them find decent work. The absence of an employment safety net leaves the underprivileged especially vulnerable. They may have no choice but to work low-paying, temporary jobs to meet immediate financial needs, or be subject to repeated hiring and firing before being pushed out of the labor market altogether. In response, the Moon Jae-in administration has committed itself to making the Korean job market more inclusive for youth, women, seniors, and other marginalized people.

Our first priority was broadening the scope of employment insurance so that it would provide expanded coverage to more beneficiaries. This led to the development and implementation of the Roadmap for Universal Insurance that is open to workers in 12 categories of non-standard employment and two types of platform employment. Employees of small businesses would benefit from increased insurance payouts for a longer duration, along with government top-ups for insurance premiums that could help alleviate their financial burdens. The results have been impressive: the number of workers (including wage workers and voluntarily enrolled self-employed people) covered by employment insurance rose from 12.66 million in 2016 to 14.67 million in 2021. Cumulative enrollment for artists and non-standard employees reached 102,000 and 565,000 during the same period, respectively.

Our next task was building the National Employment Support Scheme, a second-tier job safety net introduced in 2021. As with any type of insurance, subscribers must pay insurance premiums to be eligible for benefits. This system excluded young people in search of their first jobs and women returning to work after a career break. Temporary workers, along with self-employed people who closed their businesses, were not entitled to insurance payments, either. The Employment Support Scheme was created to help these workers who were not eligible for employment insurance. More than 41 million people are now receiving income support and tailored job-search services under this scheme.

Last but not least, the scale of Korea’s employment support system has expanded dramatically. The primary budget earmarked for job support increased from 14.8 trillion won ($12.3 billion) in 2016 to 30.5 trillion won ($25.4 billion) in 2021. This money has been spent on providing vocational training for job-seekers and those currently employed, offering financial incentives to employers, paying unemployment insurance to those who lost their jobs, connecting employers and prospective employees, creating jobs outright to provide income and working experience, and supporting start-ups. One of our proudest achievements was the introduction of the Vocational Development Card and the enactment of the Developing Lifelong Vocational Competence Act. These schemes offer lifelong support to everyone willing to acquire in-demand skills and thus make themselves more employable. We also partnered with firms, universities, and educational institutions to roll out a fully digitalized training model. This one-of-a-kind platform allows us to offer more innovative vocational education.

In the wake of the pandemic, we significantly increased the financial resources available for job creation and retention to avoid potential disruptions in the labor market. All told, 72 trillion won has been earmarked for job support in 2020 and 2021 as part of the government’s all-out effort to provide greater employment protection. More than 770,000 people were able to keep their jobs and 1.585 million public and private jobs were created last year alone thanks to such strong fiscal support. Emergency cash assistance was granted to 1.792 million non-standard workers and freelancers who had previously languished in the blind spots of employment safety nets. As a result of our commitment to enacting measures to stabilize the labor market, Korea experienced less of an employment shock than other major OECD economies. Our success won high praise from the OECD, which noted that Korea’s prompt and effective policy reaction dramatically reduced the scale of the fall in employment and growth rate relative to other OECD countries. The OECD also pointed out that Korea’s economy shrank less than any other member nations. Korea’s labor market showed telltale signs of a rebound in 2021, and employment has recovered to 99.9 percent of the pre-COVID-19 level. Our pace of return to normal compares favorably with Canada and the Netherlands, among other members of the OECD. Especially impressive is not only the number but the type of jobs recovered. Fully 60 percent of job gains have been reported in the private sector, including occupations in the ICT, high-tech, and hospitality industries. No less encouraging is the disproportionate rise in full-time workers, who are less prone to unemployment.

These successes, however, should not blind us to the challenges that lie ahead. The pandemic has hit self-employed and temporary workers especially hard. The accelerated transition to a more digitalized, low-carbon economy has spawned more diverse forms of employment, but workers in labor and carbon-intensive industries continue to face increasingly bleak job prospects. The government is committed to promoting a strong and inclusive market by offering universal employment insurance and anchoring job support schemes. Equally important is ensuring that no one is left behind in the process of industrial restructuring. To this end, we promise to ensure the seamless implementation of all support schemes. The goal is to help everyone find new employment opportunities or change their occupations. Businesses in the midst of corporate transitions and realignment can also expect the government’s backing. Staying ahead of changes in the market by growing new regional industries is no less crucial, and the government will help workers land jobs in these sectors.

By An Kyung-duk, Minister of Employment and Labor