SBS in cooperation with global consulting firm Bain&Company,
presented the 2nd ¡®Future Korea Report¡¯ on ¡®Job shock and
the future of labor¡¯ in 2005. 1.19. at Grand Hyatt Seoul.
On this day Prime Minister Lee Hae Chan, Minister of Labor
Kim Dae Hwan, President of Korean Confederation of Trade
Unions Lee Su ho, President of Federation of Korean Trade
Unions Lee Yong Deuk, President of Korea Employers Federation
Lee Soo Young, President of KORCHAM Park Yong Sung, and
many other 400 opinion leaders had participated, all agreeing
for need of more jobs.
Also experts analyzed solution for job crisis, including
author of ¡®The End of Work¡¯ Jeremy Rifkin from the perspective
of future of world labor market, and John Martin OECD Director
for Employment, Labour and Social Affairs in comparison
of other advanced countries.
SBS and Bain&Company argued that Korea should
cope with social diversification through active job creation.
Since Korean economy is likely to adhere to low growth rate,
without active strategy there is concern of increasing unemployment
that result in social problems. In addition if the economy
stays in 4% growth rate, net amount of 1 million jobs will
be gone by 2010.
Prime Minister Lee Hae Chan commented that ¡°stable
and higher employment is the creation of attractive market
for companies, not a cost.¡± He also said through public
sector and the third sector government will make effort
to increase employment rate.
According to the report 4% growth rate will occur,
by 2010, 500,000 of new jobs in service sector but loss
of 1,400,000 in non service sectors netting 1 million loss
of jobs.
Korea¡¯s unemployment rate is 3.5% rather in good
status compared to OECD countries. However according to
employment indicators of ILO it is estimated as 59% which
is similar with Mexico and just above OECD average. Report
says that if non-active populations and under 36 hours employees
are added the real unemployment rate more than doubles to
8.5%.
If unemployment number is set as the target, 800,000
people are the target. However if we set employment rate
as the target, then all together 15,000,000 people becomes
objective of the policy. Therefore the report emphasized
that employment rate should be the main indicator.
More specifically SBS and Bain&Company suggested
that in order to reach $20,000 national income, 4 million
jobs are needed and among 4 million, 2.5 million should
be filled with female workers especially with highly educated
female workers.
OECD advices that among three key factors that determines
economic growth, which are productivity, working labor,
and employment rate, Korea should focus on employment rate.
In case of Korea, due to decrease in labor hours, productivity
will slow its increase rate. Also due to low birth rate,
working labor will decrease. Therefore employment rate should
be the key target for policy.
According to OECD¡¯s analysis on GDP growth of 1990-1998,
Ireland had 26% contribution to GDP growth from increase
in employment rate. In contrast for Korea, rate of productivity
and working labor had high contribution to GDP growth but
had negative 7% of contribution from employment rate, implying
that efforts on creating jobs had been omitted in policy.
John Martin Director for Employment, Labour and Social
Affairs at the OECD stated that, from early 1990¡¯s advanced
countries had made efforts to increase employment rate to
overcome low growth problem.
On specific ways to maximize employment rate, the
report continued, in together with efforts on creating new
jobs, efforts for high quality of supplied labor forces
and efficient labor market that connects supply and demand
of labor forces are essential.
In private sector, government should promote high
value service industry through removal of regulations, open
market and competition. In other words as manufacturing
industry was promoted in the past, service industries such
as entertainment, telecommunication, tourism, finance should
be reinforced and eventually bring world best companies
as Samsung Electronics in these fields.
At the same time to absorb those who can not compete
in the market, third sector jobs such as welfare, environment,
and education should be created. Report cited in Europe
average of 8% works in the third sector and in U.S. 44%
of workers work for 1,200,000 non-profit organizations compared
to almost none in Korea, therefore concluding to extend
investment to these sectors.
In consideration with labor supply, competency in
college education was indicated most urgent. Report especially
focused on waste of education expenses to non-working college
graduates and proposed to switch these expenses to lifetime
education. Also noting that those who live with their parents
are 5 times more likely to be unemployed, report pointed
out weak working mentality among young people and suggested
stronger education on sense of work from elementary schools.
To accomplish creating 4 million jobs and national
income of $20,000 Bain&Company and SBS presented following
10 major practices.
1. Set employment rate as prior indicator
for economy, not unemployment rate.
2. Reform employment related government
organization.
3. Set up ¡®New Deal¡¯ for youth
4. Remove age limit on working and learning
5. Prepare job maps in each houses
6. Set contribution indicator on taxes
and jobs for companies
7. Create social system to create more
jobs
8. Support colleges to rebirth as high
quality human resource creator
9. Start with increasing flexibility on
labor market and wages
10. In coordination of labor, employer,
and government start with obeying small promises
SBS has produced 2 hour documentary film related to
the 2nd ¡®Future Korea Report along with 12 special series
in 8 o¡¯clock news.
Also there was a debate program with moderator former President
of Korea Labor Institute Park Hwon Gu, OECD Director Jeremy
Rifkin, Minister of Labor Kim Dae Hwan, Bain&Company
Director Lee Sung Yong.
