The process of restructuring is underway, thus creating high unemployment in 1999. To mitigate the possible effect of social istability due to mass unemployment and poverty, the Korean government should establish and effective social safety net, which...
The process of restructuring is underway, thus creating high unemployment in 1999. To mitigate the possible effect of social istability due to mass unemployment and poverty, the Korean government should establish and effective social safety net, which can catch all the vulnerable people facing the economic difficulties. This is one of the powerful means to help achieve the socio-economic integration.
Before the economic crisis, the Korean economy had maintained practically full employment where the unemployment rate was around 2.6 percent. By the end of 1998, however, the unemployment rate rose up to 7.9 percent. Since the government unemployment policy has not been effective, a sharp increase in unemployment and subsequently as swollen pool of the people in poverty has caused a possible deterioration in income inequality. In Korea's job market, there is a tendency that lower income workers are more vulnerable to restructuring and more likely to lose their jobs, thus resulting in worsened income distribution.
With this background, the government policy aiming at maintaining the social integration should focus on the following measures. First, the social safety net should be established to ensure the basic subsistence level of the unemployed and the poor. For this purpose, it is necessary to revitalize the role of the dynamic private sector to complement that of the public sector. In particular, the civil society at the community level should be encouraged to its maximum to participate in the welfare activities on a voluntary basis. Also, it is important to ensure that the social stabilization policy should be in line with the economic restructuring, in order to promote the synergy effect between economic policy and social policy.