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Economy

Large Companies That Offer 40.75 Million Won to University Graduates Can Cause Further Unemployment Problems, Experts Warn

By February 4, 2016 at 1:14 am
Employees of the Microsoft Corporation work at their head office on December 7, 2005 in Seoul, South Korea (Photo : Chung Sung-Jun/Getty Images)

According to the Korea Employers Federation, large companies would generally offer university graduates 40.75 million won, which widens the gap of unemployment between large and small companies, The Korea Economic Daily reports.

The agency called the attention of large companies to adjust the salary offer to the graduates as job seekers are now avoiding SMEs, which worsens the youth's unemployment rate.

KEF said the problem lies on two main reasons. First, the salary difference between small and large companies, which they found out that an average of 40.75 million won was offered to the university graduates last year. The figure marks a big difference of 25.32 million offered by SME's.

Mid-size companies offered starting salaries amounting to 21.89 won while small companies offered 20.55 million won. As for temporary workers at small companies, the rate is seen at 17.77 million won on average.

The second reason is the competency of salaries in Japan. Data shows that Korean large companies offer excessive salary difference than those in Japan.

JKNUS previously published an article about the rising problems of unemployment in Korea. In a report entitled, "2016 Economic Forecast" by LG Economic Research Institute, the youth unemployment rate climbed by 5.6 percent, the highest since 2000.

Analysts say that the labor market slowdown is the cause of the high rate as employers are now hiring fewer number of graduate students. Experts believe that the rate will remain high this year and may even go higher.

The Ministry of Employment and Labor also showed the result of their survey with 0.4 percent decline of new employees from the last quarter of 2015 until the first quarter of 2016.

The increasing rate of unemployment, coupled with the country's economy, may lead to other effects like the employees' payroll, which may not be increased if Korea maintains a growth of only 3-percent level.

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