The company pays employees $76 per birth

A Korean construction company pays its workers $76 for each newborn. The employer hopes that this will help solve the demographic problem in South Korea, reports EuroNews.

Photo: iStock.com/aCZhou

Since 2021, the company has paid its employees a total of $5 million, including two families for two children: in early February, they received $162 each at a New Year’s corporate party.

“If the low birth rate trend continues, we will face a national crisis: there will be a reduction in the labor force, and the army will not have enough troops needed for national security,” said Jung Geun Lee, founder of Booyoung Group.

Critically low birth rate

South Korea has the world's lowest demographic rate, with about 0,7 births per fertile woman.

Experts cite changing views on the family, a highly competitive society, the exorbitant cost of maintaining and raising children, and the low involvement of men in child care among the reasons.

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“People have two different instincts: one is to preserve their species, and the other is to survive. It's too difficult to survive now and we can't afford to worry about conservation,” said Insill Yi, president of the Population Institute of South Korea.

“The most important factor is that it is difficult to plan for the future, which is necessary if you want children. Life is very difficult and competitive now, and the future with children becomes secondary,” she noted.

Experts foresee that more and more companies will come up with such initiatives.

“One of the most important components for companies is the workforce. They may have difficulty recruiting, but another problem is that consumers are disappearing, Yee said. — Due to population decline, employers are experiencing a crisis and are wondering what to do. I believe that even more companies will soon join such initiatives.”

Thoughts about a second child that wasn't really planned

One of the Booyoung Group employees, who received payments from the company for her first child, admitted that the money gave her peace of mind.

“If our child wants to do something in the future, we can support him without worrying about finances,” said Semi Hong, human resources manager.

She is optimistic about how the incentives will motivate her colleagues.

“Even I was thinking about having a second child, which we weren’t really planning on because it’s an unconventional incentive policy. Perhaps many employees are now reconsidering their family planning,” Hong suggested.

Such a large child benefit is unprecedented, although several South Korean companies are already using new schemes to encourage fertility and ensure employee welfare.

They believe that engagement with government is necessary to provide greater support to their employees.

Booyoung proposed that the state introduce a new tax deduction system to eliminate corporate and income taxes. In this case, employees will receive all the benefits of parental benefits, and even more companies will follow suit.

A one-time bonus cannot solve all problems

Experts say work culture and a fair division of parenting responsibilities between women and men also make a difference.

“Raising a child is a task and responsibility not for a day, but until he comes of age. Minimum expenses, including tutoring, range from $145 to $000 per child,” Yee stated.

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According to the expert, now in South Korea it is mainly women who are raising children, and the share of men helping them in this is one of the lowest in the world.

The country, which had the longest working hours among OECD (Organization for Economic Co-operation and Development) countries, has slowed its growth rate and young people are seeking to achieve work-life balance.

Yi is optimistic that South Korea will see a change in demographic trends:

“Europeans, who do not understand Korea well, wonder how such a country can exist? I am an economist and I will say: Korea has always been like this. Our country has achieved a lot in a short time. I am sure that the same will happen with population problems. Together with the government, we are making a lot of efforts in all areas of life.”

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