It is no longer unfamiliar to say that Korea is a "Youth Unemployment Republic." According to data released by the National Statistical Office this year, the number of young unemployed is close to 290,000. It has been on the rise since November last year (220,000). Among the 25-39-year-old population who are college students or graduated from college (including junior college), "unemployed people" with no employment experience have also emerged as a social problem. The young job seeker cries out that there is no job. On the other hand, small and medium-sized companies complain of difficulties in finding jobs. This situation has been repeated for years. What is the root cause?
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The Korea Employers Federation cited the rigid labor market structure and labor market mismatch as the reasons for the sluggish youth employment in a report titled "How to create jobs for young people: Hope for young people on the brink" released on the 16th of last month. In particular, he pointed out that it is difficult to resolve youth unemployment unless two issues are resolved, such as mismatch in manpower supply and demand due to higher education and wage gaps and university education that cannot keep up with industrial demand. In other words, unless the labor market structure is reformed, it will be nothing more than empty talk.
First of all, the Korea Employers Federation pointed out that the rigid labor market structure is a barrier to entry for young people who want to enter the market. In particular, he added that regular workers at large companies enjoy high wages and job security due to rigid employment regulations and excessive demands from rigid labor unions, while young people are having difficulty entering the labor market. According to the National Statistical Office, the monthly wage of regular workers with more than 300 unionized workers was 4.58 million won, 2.8 times the monthly wage of non-regular workers with less than 300 unionized workers (1.66 million won).
Mismatch in the labor market is also considered a problem. As highly educated young people are concentrated on large companies and public companies, small and medium-sized companies are suffering from chronic job shortages. According to the KEF, the starting salary of college graduates at large domestic workplaces was twice as high as that of small and medium-sized workplaces and 60% higher than that of large Japanese companies. Korea's college entrance rate is over 70 percent. Highly educated young people are clinging to employment at large companies and public companies in anticipation of high wages. On the other hand, small and medium-sized companies with relatively weak working conditions are always struggling with job shortages. In a survey conducted by the National Statistical Office, young people preferred large companies. It was followed by public corporations and public officials, and SMEs had very low preferences compared to these jobs.
The Korea Employers Federation found that the "education bubble" of universities is also a problem. Although the higher education of young people is prominent, with the college entrance rate exceeding 70%, it was diagnosed that the job skills of highly educated young people are relatively weak because university education does not respond to changes in the economic environment. In addition, even if demand for cutting-edge industries such as big data and AI (artificial intelligence) increases rapidly, many universities in Korea cannot even increase the number of related departments, and the mismatch between majors and jobs is close to 50%. In a report released by the Korea Development Institute (KDI) in 2020, "70% of high school graduates go to college, but they are experiencing serious employment difficulties after graduation." In particular, 50% of the employed are employed in jobs unrelated to their majors, and the mismatch rate is the highest among OECD countries," he suggested.
Lim Young-tae, head of the employment policy team of the KEF, said, "In order to create jobs for young people, we need to reform the labor market to ease labor market rigidity, ease wage gaps, close job mismatches, and strengthen job information systems."
In particular, team leader Lim said that the university education and training system and vocational information system should be strengthened to resolve youth unemployment. "From the education stage, we need to establish a vocational education path specialized in fostering industry-tailored personnel, provide accurate information on the market, and strengthen employment support by strengthening practical and field experience, and dualize school and vocational education like Germany," he said.
A total of 114 general universities and 520 departments have overlapped departments opened for the purpose of fostering professionals. As such, while young people are complaining of job search difficulties and small and medium-sized companies are complaining of job search difficulties, another reason was that Korea's vocational education policy is not clear. The education community feared that the absence of vocational education policies could not only lead to youth unemployment but also to a decline in national competitiveness.
In fact, the Federation of Korean Industries analyzed the 2021 Education Competitiveness of Korea released by the International Institute for Management Development (IMD) in Switzerland in December last year, ranking 47th among 64 countries surveyed. This is why experts are raising their voices that it should be reorganized into a theory- and research-oriented academic university and a field-oriented vocational university to improve educational competitiveness. This is because the identity of higher education has become ambiguous in Korea as the boundary between general universities and junior colleges has disappeared.
"According to the current higher education law, universities have a profound academic theory and colleges are training professionals," said Kang Moon-sang, head of the Higher Vocational Education Research Institute affiliated with the Korea Professional College Education Council. The university should be restructured into an academic research-oriented university and a vocational education-oriented university to redefine the identity of higher education, he said.
It emphasizes the importance of vocational education in developed countries such as Europe, including the United States. U.S. President Joe Biden pledged free education at a "community college," which is equivalent to a Korean junior college, as a candidate. This is a policy that recognizes that community colleges are serving as a stepping stone to vocational education and lifelong education in the U.S. public education system.
The U.S. is also taking the lead in online vocational education and training new technology personnel by combining digital technology. The "Nano Degree" system is a representative online vocational education system in the era of the fourth industrial revolution, and it provides the latest high-tech programs needed by companies in a short-term course for about six months, centering on Silicon Valley. In other words, it is a system that learns core skills needed by promising companies in a short period of time and leads to employment.
Taiwan operates a two-track system of general education and vocational education by dividing it into general high schools and vocational high schools from the secondary education stage. In order to cultivate highly skilled technology talents, the government also pushed for a policy to convert a two-year former school into a four-year science and technology university from the late 1990s. Currently, general universities are conducting theory-based education, and science and technology universities are focusing on practice.
Germany operates a system called "Duale Ausbildung". Ausbildung is a talent training system that achieves high efficiency by learning and learning theories and practices necessary for vocational activities at two places, corporate sites and schools, according to corporate needs. In other words, it can be viewed as a dualized vocational training system. Korea proposes various policies related to vocational education, but the boundary between vocational education between general universities and junior colleges is still unclear, making it difficult for mismatch to occur in the labor market. In this respect, the implications of policies implemented by advanced countries to Korea seem great.
Nam Sung-hee, chairman of the Korea Professional College Association, evaluated the U.S. community college policy as a "strong vocational education policy." "The community college in the United States is an educational institution designed to pave the way for lifelong education and other employment for adult learners and re-employed people," Nam said. Community colleges are mostly public or state schools and are lifelong vocational education institutions that the government is responsible for, such as supporting tuition fees. "It can be said to be a strong vocational education policy," he said. "We are strengthening vocational education not only in the United States but also around the world, including Europe." "I think setting the direction of Korean vocational colleges, which are mostly private, as vocational education that our government is responsible for in the future, is the way to become a correct lifelong vocational education university," he stressed.
A recent report by the Korea Vocational Competency Research Institute on 'University Education Innovation Plan for Future Social Change' suggested ways for colleges to lead vocational education: local government vocational education accountability laws, national competency system establishment, and national efforts to innovate the vocational education system.
Heo Young-joon, a senior researcher at the Korea Vocational Competency Research Institute, said, "We need to clarify the legal basis for the functions of vocational education and vocational education institutions scattered in industrial education, vocational education training, and higher education laws."
Writer: Youngjun Kim
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