A report published by the Korea Enterprises Federation (KEF) has underscored the urgent need for an employment stability fund aimed at systematically retraining workers in anticipation of the artificial intelligence (AI) era. Released on Sunday, the report titled “Overseas Cases and Policy Tasks for Employment Stability in the AI Era” was authored by Kwon Hyuk, a professor at Korea University’s Graduate School of Labor Studies. The findings highlight how the growing uncertainty in the labor market, spurred by AI-driven industrial transformation, necessitates a shift from traditional job protection to a focus on employability maintenance through tailored education and financial support.
The report draws parallels with Sweden, which created a fund to facilitate transitions into green jobs through a tri-partite collaboration between labor, management, and government. In 2022, Sweden initiated a worker retraining program designed to ensure a smooth transition to carbon neutrality, financed through employer contributions, government subsidies, and unemployment insurance funds. KEF’s report advocates for a similar legal framework in South Korea to address its own ongoing AI transition.
In light of the changing landscape, the report emphasizes the need for enhanced financial support mechanisms, citing successful examples from major advanced economies. It argues that the current systems for addressing employment crises and vocational skills development must be integrated more effectively to foster a cycle where job retention correlates with improved worker capabilities. “The designation system for employment crisis regions and special employment support industries under the Framework Act on Employment Policy needs to be made more flexible,” the report states.
It also advocates for a convergence-based vocational training system that promotes customized education programs through collaboration between labor, management, and government entities. The report suggests that Germany’s individual learning account, which systematically manages lifelong learning, could serve as a model for enhancing coordination among existing Korean programs, such as the National Tomorrow Learning Card and the Lifelong Learning Account system, which span multiple government ministries.
Germany’s Qualifizierungschancengesetz (Skills Enhancement Opportunity Act), implemented since 2019, has expanded vocational training support to currently employed workers, covering 60% of their average wages during training. Similarly, Japan is advancing a “reskilling” initiative that aims to shift the balance of training from employer-led programs to self-directed education, targeting a worker-driven model for vocational training efficiency.
Lee Sang-ho, head of the economic division at KEF, emphasized the urgency of the situation, remarking, “As the AI-driven industrial transformation accelerates, employment instability in the labor market is deepening, particularly among vulnerable groups.” He noted the importance of absorbing the shocks of industrial transition while solidifying an employment safety net through public-private cooperation. Lee advocates for strengthening customized vocational education and rebuilding effective financial support infrastructure to address the challenges that lie ahead.
The report highlights a broader narrative regarding the need for proactive strategies in labor policy as AI technology continues to reshape industries. It calls for immediate action to ensure that workers are equipped with the necessary skills to thrive in an increasingly automated environment, thereby safeguarding economic stability and social cohesion in the face of rapid change.
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