Jobs task force warns Middle East conflict, base effect may curb employment growth

The government has warned that uncertainty surrounding the Middle East conflict and a base effect from strong employment gains last year could constrain job growth going forward.

Although employment gains have expanded for three consecutive months, difficulties persist in the youth, manufacturing and construction sectors, prompting the government to review the implementation of existing job measures and identify policy tasks for vulnerable segments.

The Ministry of Economy and Finance and the Ministry of Employment and Labor co-hosted an interagency jobs task force meeting Thursday morning at Government Complex Sejong, jointly chaired by Ministry of Economy and Finance Vice Minister Kwon Dae-young and Ministry of Employment and Labor Vice Minister Kwon Chang-jun, to discuss key employment issues.

The government assessed that employment has been on an improving trend. After falling by 40,000 in May compared with the same month a year earlier, the year-on-year gain reached 63,000 in June, 108,000 in July and 184,000 in August — marking three consecutive months of expanding growth.

However, the government noted that lingering uncertainty over the Middle East conflict, combined with a base effect from a 312,000 increase in employed people in September last year, could act as a drag on future employment growth. It also judged that difficulties in vulnerable sectors and underperforming industries — including youth, manufacturing and construction — are continuing.

Data from the Ministry of Statistics bear this out. According to its August employment survey, the number of employed young people aged 15 to 29 fell by 143,000 from a year earlier, marking 46 consecutive months of decline. The youth employment rate also fell 1.0 percentage point year-on-year to 44.1 percent, meaning the broader expansion in employment has yet to translate into a recovery for young workers.

The government plans to develop measures to provide quality jobs and training opportunities so that the benefits of economic growth spread evenly across the economy. It will continue to monitor conditions in vulnerable sectors and underperforming industries and identify sector-specific policy tasks.

To that end, the government will review the execution and preparation status of major measures, including the "Youth New Deal" initiative announced in April and the "Youth Job Recovery Plan" released in August. The Youth Job Recovery Plan calls for expanding training opportunities in advanced and high-demand fields to cover 300,000 people by 2030, and for creating more than 300,000 job, work-experience and entrepreneurship opportunities in the private and public sectors.

Young people who take jobs at small and medium-sized enterprises in regional areas will receive support worth up to 1 million won ($744) per month for two years through a combination of programs including the Youth Job Leap Incentive and the Youth Future Savings Account. The plan also includes measures to match training graduates with companies seeking workers and to support career development after employment.

The Youth New Deal is designed to support about 100,000 young people through vocational training and education, work experience, re-entry support for those who have left the labor market, and improvements to job infrastructure. Key initiatives include the "K-New Deal Academy," designed and operated directly by large corporations, expanded public work-experience programs, and youth-tailored employment support.

"We will pool the capabilities of all ministries to do our utmost to improve employment conditions in ways that people can actually feel," Vice Minister Kwon Dae-young said. Vice Minister Kwon Chang-jun said the government would "review job programs, identify tasks together with related ministries, and work to make them concrete so that practical help reaches those who need it."