How much is a baby worth? A $75,000 bonus, this South Korean firm says

Seoul — Successive South Korean governments have tried pretty much everything to try to persuade women to have babies. Among their initiatives: subsidized housing for newlyweds, discounted postpartum care for new mothers, even a “baby payment” of $2,250 for each newborn.

Now corporate South Korea is getting in on the act, trying to stave off a demographic crisis that could see the country’s workforce halve within 50 years. Some are pledging millions of dollars in bonuses for their staff who become parents.

“We will continue to do what we can as a company to solve the low birth issue,” Lee Joong-keun, the chairman of Booyoung Group, a Seoul-based construction company, said last week after awarding a total $5.25 million to his employees for 70 babies born since 2021.

Both male and female employees at Booyoung are eligible for a $75,000payout each time they have a baby — no strings attached.

Other companies in South Korea are offering payments, too - although none quite as generous as Booyoung’s.

This development has come about as South Korea’s fertility rate — the average number of children a woman has over her lifetime — has plummeted to be the lowest in the world, at 0.78 in 2022.

That means the population is aging rapidly. By 2072, half the population will be over 65 — meaning companies big and small will have trouble finding people of working age to employ.

The decline in South Korea’s working-age population, if it continues at the current pace, will build up to an “existential crisis” for the country, said Lee, Booyoung’s 83-year-old chairman.

The payments are designed to help employees grow families without compromising their careers. “The main reasons behind the falling birthrate are the financial burdens of child care and challenges of balancing work and family lives,” Lee said at a company event.

His company’s offer is far more generous than even South Korea’s biggest carmaker, Hyundai Motor, which last year launched a dedicated task force last year to boost employee birthrates. The company is offering up to $3,750 as a payout for each newborn.

Posco, the country’s top steel producer, also offers $3,750 per child in baby bonuses. Posco chairman Choi Jeong-woo last year visited an employee who is raising quadruplets, hand delivering a cash gift and a stroller for the new parents, according to a company statement.

The companies’ efforts have won praise from South Korean President Yoon Suk Yeol.