A Study on Plans to improve Vocational Training System for the Working Poor
Researcher-in-charge: Cheol Hee Kim
Based on the analysis of the measures of promoting skills development of the working poor, it is suggested that a customized vocational training system is established by developing and providing systematic programs based on mid- to long-term planning, thus moving away from providing once-off, short-term vocational training services;
and the current policy and system related to the working poor need to be improved to better reflect the actual circumstances while the skills development programs currently offered to the unemployed and employees are improved to warrant effectiveness.
I. Rationale and aim 1. Rationale
□ Poverty rate has not fallen significantly following the global financial crisis
○ Despite that the unemployment rate has been stable, there has been little changes in the poverty rate; it implies that the group of working poor has increased mainly due to polarization of jobs with people not earning sufficiently even they are working or employment is precarious and so temporary and irregular employment are rising
□ A number of people belonging to working poor lie in the blind spot of the social safety net in regard to employment, labor market policy, social insurance and so on
○ It means that there exists a large pool of ‘potential working poor,’with the risk of becoming working poor even with slight worsening of circumstances
□ Skills development of the working poor is critically important in order to establish the foundation for welfare and labor policy formulation, and to improve labor market conditions
○ The issue of working poor is a key challenge to tackle not only from the social perspective of ensuring people to live like a human being and resolving income inequality but also from the perspective of establishing and implementing labor market policy, developing and allocating human resources, and from the point of view of securing sustainable growth potential
2. Aim
□ This study is aimed at identifying measures of promoting skills development of the working poor
○ After classifying working poor into different types, the characteristics were analyzed from the skills development dimension, and analyses were also carried out to look at the changes in vocational training system and policy, the benefits of skills development, participation and performance, the link between income security policy measures and employment service, and so on
II. The research
1. Concept of working poor and the current situation
□ Concept of working poor
○ Working poor is interpreted and applied differently for convenience andto sere different purposes, but, generally, working poor refers to the poor with capacity to work, all those wage earning workers with full-time
jobs unable to bring their families out of poverty, and those workers in poverty even with employment
□ The current status of working poor
○ The working age poverty rate of households peaked at 10.2% in 2007 and 2008 before gradually declining, dropping to 8.9 % in 2012
- The employment poverty rate of households peaked at 8.9% in 2007 and gradually fell thereafter, but it is on an upward trend, reaching 8.1% in 2012; meanwhile, the working wage poverty rate peaked at 11.1% in 2009 before entering a downward trend, reaching 9.5% in 2012
2. Analysis of policy and system for facilitating independence of the working poor
□ System and policy in support of self-reliance of the working poor
○ Analyzed were self-reliance support policy for the working poor, including the rehabilitation program for those with able to work under the national basic livelihood security system, tax breaks for promotion of work aimed at the working poor in wage earning employment, the minimum wage system, and the skills development policy and so on
□ Combination of policies is needed among closely related policies including rehabilitation program, work- promoting tax incentives, minimum wage system and skills development policy
3. Empirical analysis of skills development of the working poor
□ In order to analyze the size of the working poor and the annual trends of participation in skills development, pooled data of the Korean Labor and Income Panel Study (5th~12th wave) was used, while the 12th and 13th wave of the panel data were used for quantitative analysis to analyze the outcome of skills development
□ Analysis results
○ Looking at the participation rate of working poor and non-poor working people in vocational training, the working poor has lower participation rates than the non-poor working group, and the gap in vocational training participation between the two groups has persisted (the participation rate in vocational training was about 5% for the working poor and about 9% for the working non-poor group
○ 5.9% of the working poor indicated they are interested in participating in vocational training, as compared to 8.0% for the working non-poor, and the two groups indicated that computer, information and telecommunications as the preferred fields of training apart from those they have already taken part ○ The working poor group was higher in the proportion of females by about 7%, and in age by about 3 years
compared to the working non-poor group, while lower in education level and in the ratio of having a partner ○ In the case of the working non-poor group, the experience of skills development resulted in some 12%p
increase in wage, while the respective wage increase effect for the working poor was 33~36%p given that the relative poverty and the minimum cost of living were 100%
4. Skills development of the working poor
□ Analysis results
○ Strategic promotion of skills development should be directed to the working poor, especially with respect to the elaborated concept of skills development, vocabulary and related policy measures and system on skills development; micro and macro level approaches should be undertaken simultaneously to improve skills development of the working poor
III. Policy suggestions
1. Direction of promoting skills development of the working poor
□ A customized skills development system needs to be created to in order to allow the working poor to escape poverty and improve their skills
○ A systematic support needs to be provided on skills development to assist the working poor to prepare for their labor market participation, and to maintain their employment after entering the labor market; rather than providing once-off, short-term vocational training services, systematic programs should be developed and provided based on mid- to long-term planning, thus building a skills development environment tailor-made for the working poor
2. Measures of promoting skills development of the working poor
□ The suggested policy measures for facilitating skills development of the working poor are as follows:
○ Improvement in the employment-welfare linking system and policy; reinforcement of incentives to participate in skills development and provision of customized skills development; development and provision of programs reflecting the skills development needs of the working poor
