hankyoreh

South Korean Finance Minister Hong Nam-ki presides over a meeting on the Korean New Deal at the Central Government Complex in Seoul on July 8. (Yonhap News)

The “Korean New Deal” to be announced by the Blue House on July 14 is expected to total 100 trillion won (US$82.9 billion), including an investment of 15.1 trillion won (US$12.5 billion) through 2025 toward reinforcing the employment safety net.

According to accounts on July 13 from the Ministry of Economy and Finance (MOEF) and the National Assembly, a total of 6.4 trillion won (US$5.3 billion) is to be invested between 2020 and 2022 in the employment safety net reinforcement that serves as the Korean New Deal’s foundation. The number is 1.4 trillion won (US$1.16 billion) higher than the 5 trillion won (US$4.15 billion) announced in June. An additional 8.7 trillion won (US$7.22 billion) is to be invested through 2025 -- meaning a total of 15.1 trillion won invested in employment safety net reinforcement over the next six years.

This is expected to increase the total scale of investment in the Korean New Deal, including the Digital and Green New Deals as well as employment safety net reinforcement, from its previous 76 trillion won (US$63 billion) to around 100 trillion won.

The employment safety net reinforcement is to focus on five core projects. First, 1 trillion won (US$829.5 million) is to be spent through 2022 toward establishing an employment safety net for all South Koreans and reinforcing the social safety net. The amount is 100 billion won (US$82.9 million) higher than in the original plan. Another 2.4 trillion won (US$1.99 billion) is to be invested between 2023 and 2025. In the process, workers in “special forms of employment” and microbusiness proprietors are to be brought inside the employment insurance framework, with the number of enrollees to be expanded from 14 million as of last year to 17 million by 2022 and 21 million by 2025.

Industrial accident insurance enrollment is also to be increased for door-to-door sales workers, home appliance installation workers, cargo vehicle drivers, and other workers in special forms of employment, expanding the total number to 166,000 by 2022, with further expansions planned after that.

Another 3 trillion won (US$2.49 billion) is to be spent through 2022 to introduce a national employment support system to assist with livelihood and employment stability while alleviating employment insurance blind spots. The planned measures include a “job-seeking encouragement allowance” of 3 million won (US$2,489) to young people and low earners who are not enrolled in employment insurance. An additional 4.1 trillion won (US$3.4 billion) is to be invested over the following three years through 2025, with the objective of creating 39,000 jobs over the six-year period.

Other plans include the investment of 700 billion won (US$580.70 million) through 2022 and 1.6 trillion won (US$1.33 billion) during the three years after that toward “future key workforce training,” including professional training in new technology areas through “K-future training” and “K-digital credits” to subsidize training costs. Targets include 20,000 jobs created by 2022 and 63,000 in the three years after that.

Another 1.4 trillion won (US$1.16 billion) is to be invested through 2022 into encouraging attempts to enter the labor market -- including 900 billion won (US$746.9 million) for the creation of digital-oriented jobs for young people -- as well as job changes for mid-aged workers and support for startups. The number is almost three times higher than the previous amount of 500 billion won (US$414.9 million). But in consideration of the emergency situation with the COVID-19 pandemic, the young people’s digital job program is only to operate through 2022. After that, 300 billion won (US$248.9 million) is to be spent through 2025 in ongoing job transition and startup support.

Additional spending of 300 billion won through 2022 and another 300 billion won between 2023 and 2025 is intended to support innovations in industry safety and working environments. The funds are to be used toward industrial accident prevention and consulting to remedy long working hours and improve working environments.

The employment safety net improvements included in the government’s Korean New Deal retain the safe broader framework as announced in June, but with larger outlays. Lee Byung-hee, chief of the Korea Labor Institute’s social policy research division, said, “Rather than being intended to create a new social contract in terms of basic working rights and other areas, this seems very much like an effort to escape the coronavirus crisis and establish new growth drivers to prepare for what comes after it.”

By Lee Jeong-hun, staff reporter

Please direct comments or questions to [english@hani.co.kr]