Unemployment, Low Wages, & Disability Employment Rate Missed Opportunity

The government will raise the mandatory employment rate for disabled people in private companies from 3.1% to 3.3% next year for the first time in eight years. Even though the government decided to increase the mandatory employment rate during the COVID-19 incident, it postponed implementation. As a result, the likelihood of people with disabilities becoming unemployed has increased, and the situation of moving between low-wage jobs has become more severe.

The Ministry of Employment and Labor announced on the 10th that a partial amendment to the Enforcement Decree of the Employment Promotion and Vocational Rehabilitation Act for the Disabled, which includes a plan to increase the mandatory employment rate for the disabled in private companies, was approved at the Cabinet meeting. The mandatory employment rate for the disabled, which is 3.1%, will rise to 3.3% next year and 3.9% in 2029.

The mandatory employment rate for the disabled, which applies to workplaces with 50 or more full-time workers, is divided into the private and public sectors. The private sector has maintained the mandatory employment rate at 3.1% since 2019. On the other hand, the public sector rose from 3.4% in 2019 to 3.6% in 2022 and then increased to 3.8% in 2024. The current government has set a goal of 4% by 2029.

The reason the mandatory private employment rate has been frozen for eight years is because of the COVID-19 incident. The government decided to raise the mandatory employment rate to 3.5% in the private sector and 3.8% in the public sector in 2019. However, considering the difficulties in hiring companies due to the COVID-19 incident, the government returned this plan to square one.

As the mandatory employment rate increase failed, employment of the disabled through this system did not improve but rather took a step back. Looking at the employment rate over the past three years, the overall population employment rate is rising from 69.2% in 2022 to 69.9% in 2023 and 70% in 2024. On the other hand, during the same period, the employment rate of the disabled has been declining from 50.3% in 2022 to 49.8% in 2023 and 48.4% in 2024. The unemployment rate for disabled people, which was 3.4% in 2023, also rebounded to 5.1% last year.

Most people with disabilities work in places with poor quality jobs. The wage gap between the disabled and all workers is gradually widening. The average monthly wage of disabled people in 2020 was 1.92 million won, which was 72% compared to the average monthly wage of all workers, which was 2.68 million won. However, in 2024, this ratio worsened to 66%. 74% of wage earners work at businesses with less than 50 employees, so wage growth appears to be limited. Aging is also serious. The proportion of people with disabilities aged 65 or older rose from 42% in 2015 to 55% last year.

The Lee Jae-myung government has decided to expand employment, including allocating the Ministry of Labor’s budget for projects for the disabled this year to 1 trillion won, the largest ever. In October last year, the government announced an employment support plan that included raising the mandatory employment rate, strengthening vocational training, and improving working conditions. The Ministry of Planning and Budget has decided to early execute about 70% of this year’s 1 trillion won employment promotion fund for the disabled by the first half of this year. President Lee Jae-myung also mentioned the need to increase the burden on businesses that violate mandatory employment of the disabled in the Ministry of Labor’s work report on December 11 last year.

Yang Jong-gon, employment and labor reporter ggm11@sedaily.com