South Korea to tackle chronic youth unemployment with $3.7 billion extra budget plan

By Jennie Oh  |  March 15, 2018 at 5:15 AM
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SEOUL, March 15 (UPI) -- The South Korean government aims to reduce youth unemployment rate to under 8 percent over the next four years by creating up to 220,000 jobs.

On Thursday, various government ministries unveiled a four-point roadmap to tackle the country's worst unemployment figures seen since the Asian Financial Crisis.

The government plans to encourage small-and-medium sized enterprizes (SME) to hire new full-time workers by subsidizing up to one-third of their salaries for three years.

To increase income for young SME workers by at least 10 million won ($9,400) a year to match the level of salaries offered by large corporations, the government will also exempt new workers from under 34 years-of-age from income tax for a stretch of five years.

Various subsidies and loans will also be provided to reduce housing and transportation costs.

Also, in a bid to nurture start-ups, subsidies of up to 100 million won will be available for young entrepreneurs as well as a five-year corporate and income tax exemption.

Authorities will also focus on increasing new job opportunities locally and also overseas through intermediary and mentoring programs, as well as offer various vocational and specialized programs to enhance skillsets.

To back the four-point plan, Finance Minister Kim Dong-yeon said the government is seeking a budget supplement of 4 trillion won ($3.7 billion).

An extra budget proposal will be submitted to the National Assembly for approval early next month.

According to government figures, there are an estimated 430,000 active jobseekers aged between 15 and 29, putting the youth unemployment rate at 9.8 percent.

However, the actual jobless rate including those wishing to work but not actively searching for jobs is estimated at 22.7 percent, amounting to 1.1 million people.

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