After President Lee Jae-myung recently called for a review of establishing a dedicated youth policy agency at a meeting of senior secretaries and advisers, the ruling party is preparing a revision to the Government Organization Act to create a minister-level agency tentatively named the "Ministry of Youth" or "Youth Office." The bill is reported to grant the new organization not only integrated management of youth policy but also independent authority over budget planning and execution. Plans to allocate project funds dedicated to youth policy as a separate item in the government budget and to create a standing committee in the National Assembly are also likely to be considered.
It is not as though a government control tower dedicated to youth policy does not currently exist. In 2020, under the Moon Jae-in administration, the Youth Policy Coordination Committee, chaired by the prime minister, was launched and remains in operation. However, it has been run loosely, with full meetings held only one to three times a year through the end of last year, and roughly one-third of those conducted in writing. The ruling party's review of establishing a minister-level ministry this time is understood as an effort to overcome these limitations of the existing committee.
For the newly launched minister-level youth agency to take root properly, it must draw up a detailed action plan capable of producing tangible results. The most urgent task is resolving the youth employment crisis. The number of permanent youth workers peaked at 2.558 million in May 2022 before declining, reaching just 2.124 million in May this year. Last month, the youth employment rate stood at 43.8 percent, down 2.4 percentage points from a year earlier. Labor productivity ranks in the lower tier of the Organization for Economic Cooperation and Development (OECD), while labor costs rise and labor regulations tighten, leaving companies with little choice but to hesitate over new hiring. Under these circumstances, a Youth New Deal program that provides an additional 23,000 public-interest jobs and the like cannot easily replace quality private-sector jobs.
The success or failure of youth policy depends on whether labor reform is achieved. Policies that loosen rigid labor regulations and raise productivity are more important than anything else. The uniform 52-hour workweek should be made more flexible so that companies in advanced industries can devote themselves to research and development of cutting-edge technology around the clock. The regulations of the Yellow Envelope Act, which included management's investment decisions among the subjects of labor disputes, should also be supplemented. The domestic minimum wage, which next year will be 17.9 percent higher on an after-tax basis than the average of the Group of Seven (G7) on a purchasing power parity basis, should be differentiated by industry and region. Only by eliminating companies' concerns over new hiring through strong labor reform can a large number of quality jobs return to young people.
