00:0683% of big unionized companies still pay by seniority, not performance, and it's making
00:13it harder to move talent where it's needed.
00:16A quarter of young workers at small companies don't even know they qualify for a major income
00:22tax break.
00:23Korea just redefined youth for employment policy, raising the cutoff from 29 to 34, and
00:31LH just promised 20,000 new rental units in central Seoul, with most reserved for young
00:38people.
00:39It's Wednesday, September 9th.
00:41Let's talk about a trend affecting young professionals in Korea.
00:45Korea's seniority-based pay systems reward tenure over performance, which experts say
00:51is squeezing out room for merit-based raises and making it harder for companies to shift
00:57talent towards strategic industries.
01:00At the same time, valuable government benefits like income tax breaks often go unclaimed simply
01:06because eligible workers never hear about them, and the government just widened who officially
01:12counts as youth for employment and housing policy purposes.
01:16workers with 30-plus years of tenure earn 3.08 times what first-year employees make versus
01:26a gap that stays under two times in Japan and much of Europe, even though skill-based wage
01:32gaps in Korea are far smaller than in Germany or Japan.
01:3683.1% of unionized companies with 300 or more employees still use seniority-based pay, while
01:4563.4% of workplaces with under 100 employees have no formal wage system at all.
01:5352.3% of young workers at small and mid-sized companies either didn't apply for a tax exemption
02:00they qualified for or didn't know it existed, even though the program can cut up to $20 million
02:06won in income tax over 10 years.
02:09The government expanded its legal definition of youth for employment policy from ages 15-29
02:16up to ages 15-34, effective September 18th, formally aligning the law with programs that
02:24already served that wider age range.
02:27LH will supply 20,528 buy-to-rent housing units in central Seoul over three years, with
02:3514,558 reserved for young people whose lease application competition ratio already runs
02:43at 130 to 1.
02:44So what does this mean for young professionals navigating their next move?
02:50Earlier we said a quarter of young workers at small companies didn't even know about their
02:55income tax break.
02:57Here's what that actually means for you.
02:59If you work at a small or mid-sized company outside Seoul, check your eligibility for the
03:05reduction directly, rather than waiting for your employer to bring it up.
03:10Most non-applicants said they simply didn't know, not that they didn't qualify.
03:15And if you're now 30 to 34, you may newly qualify for youth employment programs and housing options
03:22like LH's expanded rental units that weren't officially available to you before this month.
03:27What to watch, whether the National Tax Service's promised awareness campaign actually raises
03:34the tax break application rate, how companies respond to pressure for job-based pay systems
03:40as retirement age extension talks continue, and LH's rollout pays for its 20,528-unit rental
03:49program, and whether young applicants in their 30s see meaningfully better odds.
03:54That's today's AI Prism Early Careers.
03:57This episode was produced with AI Prism Early.
04:01You've been listening to AI Prism from Seoul Economic Daily.
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