Young South Koreans face long haul for jobs

17 May, 2004

How far would you go to clinch a job? For South Korean engineering student Kim Dong-wan the answer was 470 km (290 miles) - on foot.
Desperate to show his commitment to landing a sought-after apprenticeship, the 27-year-old ran from the capital Seoul to the industrial city of Ulsan, home of the world's top shipbuilder.
The extreme lengths he went to land a job at Hyundai Heavy Industries illustrate the growing difficulty young South Koreans face getting work in a sluggish economy.
A survey by employment magazine Scout found that four out of 10 of this year's university graduates have no job.
It said college graduates last year applied on average to 16.7 companies before landing a job.
"I once met a college graduate who filed more than 100 applications," said Scout's chief executive, Kim Hyun-sup.
"If you count those who gave up job-hunting or returned to school and those who want full-time job but work part time, the unemployment rate should reach 18 to 20 percent for youngsters."
Government data showed the unemployment rate for those between 15 and 29 in March was 8.8 percent, close to the highest in three years. More simply put, half of the jobless total was accounted for by those in their 20s.
Other age groups fared better, though, with the overall headline unemployment rate last month at 3.4 percent.
Recognising the sensitivity of the issue, authorities have vowed to create two million jobs in the period to 2008.
The government of President Roh-hyun, who has been suspended from duty pending a ruling on an impeachment vote, came to power enjoying strong support from the tech-savvy young.
But despite vowing to make job creation the centre piece of economic policy, analysts are sceptical that business will become less shy about adding staff in this climate.
Mike Moran, an economist at Standard Chartered, agreed. "You really need to see a stronger recovery in domestic demand which could be fuelled by growth in the domestic services sector."
A recent poll by recruit firm JobKorea showed that 67 percent of the top 300 companies in South Korea planned either to cut back on hiring or to maintain last year's level.
Some South Koreans have tried to set up their own businesses, but a chilly domestic economy, still suffering from a soured credit boom, has made start-ups more difficult.
The number of new businesses in the country's eight major cities fell to 2,931 in March from 3,007 a year earlier, central bank data showed. But the number of start-ups has been rising steadily this year.
Cost-cutting remains the mantra, and even companies reporting higher earnings are not aggressively hiring.
In another blow to the job market, firms have been shifting operations to China and other cheap-labour countries, a trend at times not helped by militant South Korean unions keeping up the pressure for higher wages.
To help the situation, economists called on the government to boost labour market flexibility.
"The major problem for Korea is the competitive threat from China and also the rigidness of the domestic labour market," said Joseph Lau, an economist at CSFB in Hong Kong.
"The high jobless rate reflects a lack of flexibility. It's harder to lay off people in key manufacturing sectors. It doesn't make sense that they hire people but can't lay them off."
Lau said South Korea would find the trend of hollowing-out and job outsourcing, spurred by cheap costs in China, far more pronounced in coming years.
A growing number of foreign workers could also reduce opportunities for domestic job seekers, although many foreigners are doing jobs South Koreans don't want.
The Labour Ministry said on March 25 it would let 80,000 more foreign workers into the country this year, taking the estimated number of foreign workers, including illegal entrants, to 500,000.

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