In the past year, Kim Yoon-sung applied to about 120 companies for a job and could not land even one.
Instead, the 26-year-old South Korean is on her fourth outsourcing contract, one of tens of thousands of young graduates struggling to get regular employment in Asia’s fourth-largest economy.
“It’s become normal for people in my generation to fail even after writing applications for well over 100 companies,” Kim said. “The situation is just getting tougher.”
Photo: EPA
The rigid labor market is increasingly seen as a drag on an ailing economy that South Korean President Park Geun-hye says needs “major surgery.”
Park is pushing a revamp in labor laws that would be the biggest in nearly two decades. It would change the system of stable employment and seniority-based remuneration that was part of a social contract enforced by the unions and which underpinned South Korea’s breakneck economic growth into the 1990s.
Park wants to make it easier for companies to fire underperformers, base wages on merit, shorten working hours, ease outsourcing rules and expand unemployment insurance.
Her ruling party hopes to push labor reform legislation through the session of parliament which ends in December, but faces opposition from some unions and the main rival party.
However, the conglomerates that have driven South Korea’s emergence as an industrial power support more flexible labor laws.
“This is the first time in many years that we are trying to do something to change a problem that is getting ever more serious,” said Kim Dong-one, the dean of Korea University’s business school.
Limited labor flexibility makes it harder to build the services sector in an economy dominated by companies like Samsung Electronics Co and Hyundai Motor Co. Young graduates covet the big conglomerates for their better-paid jobs and are less inclined to join smaller companies that would follow Park’s “creative economy” push.
The World Economic Forum ranks South Korea 86th for overall labor market efficiency and 106th for flexibility in hiring and firing. Japan, whose decades of stagnation are often invoked by South Korean policymakers as a cautionary tale, ranks 22nd and 133rd.
The Korean Confederation of Trade Unions, the more strident of two big labor umbrella groups, says the reforms would hurt job security and wages, and destroy collective bargaining, and has vowed to oppose all ruling party candidates at parliamentary elections due in April next year.
On Wednesday, it called a nationwide strike and held a rally in Seoul that drew thousands of people, with some protesters scuffling with police.
The opposition New Politics Alliance for Democracy (NPAD) is demanding any change in labor laws be tied to legislation that requires firms to share more profits and increase employment.
With 47 percent of parliamentary seats, the opposition cannot by itself block the legislation, although the NPAD holds the chairmanship of a key committee that would review the revisions.
The government is betting that enough voters are discouraged by their job prospects to make it worth pushing the legislation ahead of the elections.
The last time South Korea made major changes to its labor rules was in 1998 when it enabled companies to lay off workers under emergency circumstances in exchange for a bailout from the IMF.
At 22 percent, the share of temporary workers in South Korea is double the Organisation for Economic Co-operation and Development average. Non-permanent workers are falling further behind on wages, earning 54 percent of what regular employees earn for similar work in South Korea, compared with 65 percent in 2004, government data showed.
Youth unemployment hit a 16-year high earlier this year and could worsen as the retirement age begins to rise next year.
Kim, who at university studied Chinese language and literature, and spent six months as an exchange student in Beijing, earns about 1.2 million won (US$1,007) a month in her temporary job, roughly half the average starting salary for staff positions at South Korean firms, based on publicly available data.
She said she has lowered her expectations.
“I am no longer looking at big companies, but just hope to get an opportunity at any company doing business with China,” she said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts