The purpose of the program is to provide financial assistance to young adults to pursue job preparation activities such as studying for company entrance exams and building up their resumes, measures considered necessary in South Korea’s highly competitive job market. (Image: Yonhap)
SEOUL, March 13 (Korea Bizwire) — After opening on March 2, the first of two registration periods for Seoul’s monthly stipend program for job-seeking young adults closed today.
The second registration period opens in May, when 3,000 of the applicants will be selected as recipients for the 500,000 won monthly allotment guaranteed for up to a possible six months.
All told, 7,000 individuals will be selected for the program this year, 2,000 more than in 2017. Selection criteria include an age requirement of being between 19 to 29, unemployed status and hailing from a Seoul household with an income less than 150 percent of the South Korean median household income as of March 20.
The monthly stipend program was first brought forward by the Seoul Metropolitan Government in 2015, but opposition from the Ministry of Health and Welfare delayed the project from being properly implemented until last year. 5,000 individuals were selected in June and began receiving their monthly stipends in July.
The purpose of the program is to provide financial assistance to young adults to pursue job preparation activities such as studying for company entrance exams and building up their resumes, measures considered necessary in South Korea’s highly competitive job market.
According to Statistics Korea, official youth unemployment (15-29 years old) reached 9.9 percent last year, the highest on record, and real unemployment rate stood at 22.7 percent, a telling sign of the employment difficulties a significant portion of South Korean young adults face.
The 500,000 won monthly stipend should in theory be able to cover expenditures for job preparation; data from the Ministry of Employment and Labor indicates that young adults spend an average 453,000 won per month for this purpose.
A Seoul city official explained the monthly stipend program as “the minimal social safety net provided for young adults to be able to gain the time to ready themselves for entering into society.”
“Clean Card”, the Woori Bank card where monthly stipends are deposited into. (Image: Yonhap)
Approval among the beneficiaries of the program is near universal. In a survey and focus group interviews of 5,000 former recipients conducted by a Sogang University professor disclosed earlier this year, 99.2 percent said the monthly allowance had been helpful, with 82.7 percent answering that it was “very helpful”.
Furthermore, 67.5 percent responded positively to questions asking them of their chances of being hired or starting a business, indicating that the monthly stipend program had helped them to recover their confidence.
“It feels I’ve received three times the actual amount,” said one former recipient. “Now that my physical exhaustion is gone, the stipend feels like 1.5 million won, not 500,000 won.”
Despite the good intentions and the favor it has curried among the targeted group, the monthly stipend program has been criticized for insufficient restrictions on spending.
While the description of the program identifies direct (exam fees, tutoring bills) and indirect (meals, transportation) expenses that are the purpose of the monthly stipends, recipients can use their allowances at nearly any establishment, such as cinemas, hotels and even cosmetic surgery clinics.
As only 45 business categories out of a possible 340 are restricted, opponents of the monthly stipend program have said Seoul’s reliance on what amounts to an honor system has created a blind spot with no oversight on the disbursement of public funds.
These concerns flared up last September, when 264 recipients of last year’s monthly stipend program were found to be in violation of the principles of the program and expelled. However, these individuals were removed from the program for failing to follow procedures or fulfill requirements; whether spending on non-career building areas occurred was undetermined.
At the time, officials said that in such instances any funds spent inappropriately would be recovered, and future violations detected via close monitoring.
Mayor Park Won-soon has been accused of populist tactics in regards to the monthly stipend program. (Image: Yonhap)
In addition, accusations of ineffective policy and populism have been hurled at the city government for its financial assistance initiative. Some have wondered whether beginning this year’s monthly stipend distribution in April rather than in July like last year is a move made to court favor in advance of regional elections set to take place in June.
S.B.W. (sbw266@koreabizwire.com)
