Daily NewsView All News
Korea should strengthen its social safety net and improve support for laid-off workers to help them find a new job more quickly, according to a new report by the Organisation for Economic Co-Operation (OECD).
The ‘Back to Work: Korea’ report says the country has avoided the worst effects of the economic crisis, with the unemployment rate back to its pre-crisis level of around 3%.
But it said more efforts need to be made to help workers who lose their jobs when their company goes bankrupt or downsizes, especially older and low-skilled workers. In Korea, this affects between 2.5% and 5% of workers aged 20-64 years old each year, the report states. The rate is slightly higher among women at 3.8%, compared to men at 3.2%.
Less than half of laid off workers find another job within one year, the OECD warned. Older workers, the least qualified and those in small firms are most at risk of losing employment and staying unemployed for a long time.
Over two-thirds of laid-off workers find work in the same or similar occupation. But earnings tend to be lower in the new job. Laid-off workers who are back in work within a year experience a -4% fall in real monthly wages on average and a -10% fall in real annual gross income. They are also less likely to have regular contracts on their new job and get fewer benefits.
The organisation therefore urged Korea to boost staffing levels in the local job centres to improve time spent on helping the unemployed. The country should also provide more intensive support to jobseekers who have been out of work for six months or more. There should also be a greater focus on vocational training programmes, it said.