South Korean pres­i­dent vows to push la­bor re­form

The China Post - - LIFE GUIDE POST -

South Korean Pres­i­dent Park Ge­un­Hye on Thurs­day vowed to push through la­bor re­forms to ease grow­ing youth un­em­ploy­ment at what she termed a “make or break” mo­ment for Asia’s fourth-largest econ­omy.

Roughly half­way through her sin­gle, five-year term, Park warned dur­ing a live TV ad­dress that the com­ing three to four years were crit­i­cal for plac­ing the econ­omy on a long-term, sus­tain­able growth path.

With a rapidly age­ing pop­u­la­tion pos­ing tough pro­duc­tiv­ity chal­lenges, Park said re­forms were nec­es­sary to shake up the public and fi­nan­cial sec- tors, as well as the la­bor mar­ket and ed­u­ca­tion.

“In or­der to re­solve chronic struc­tural prob­lems ... the econ­omy needs a mas­sive over­haul,” she said.

South Korea has posted four con­sec­u­tive years of eco­nomic growth be­low 4.0 per­cent — un­usu­ally slow by its own de­mand­ing stan­dards, and Park warned that global com­pe­ti­tion was be­com­ing “fiercer” ev­ery day.

“The com­ing three or four years will be a make or break pe­riod for the fu­ture of the Re­pub­lic of Korea,” she said.

Park said the ex­ist­ing, rigid wage sys­tem in the public sec­tor, which is based on se­nior­ity rather than per­for­mance, had to be re­placed with a flex­i­ble, merit-based sys­tem.

She also urged work­ers to ac­cept a pro­posed wage cap sys­tem, un­der which older work­ers swap an ex­tended re­tire­ment age for fixed salaries re­gard­less of their se­nior­ity.

If all public com­pa­nies adopted the sys­tem within a year, Park es­ti­mated the sav­ings would al­low for the cre­ation of 8,000 jobs for young peo­ple.

The un­em­ploy­ment rate for peo­ple aged be­tween 15 and 29 stood at 10.2 per­cent in June, and Park said eco­nomic dif­fi­cul­ties were pre­vent­ing young peo­ple from start­ing fam­i­lies — ex­ac­er­bat­ing the de­mo­graphic shift to a more aged pop­u­la­tion.

“It’s high time we made a de­ci­sion for our sons and daugh­ters and for the fu­ture of the coun­try,” Park said.

The youth un­em­ploy­ment prob­lem has deep­ened with the rise in the num­ber of peo­ple be­ing em­ployed as ir­reg­u­lar work­ers, who com­pa­nies can shed more easily when times get hard.

Park’s la­bor re­form plans are sure to be met with stiff union re­sis­tance, but the pres­i­dent said full-time and high-salaried work­ers need to “make con­ces­sions” for the younger gen­er­a­tion.

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