Billionaire boss of giant company offers employees $75,000 bonus to encourage them to have children
South Korea's major corporations are stepping in to help reverse a trend that could see the country's workforce cut in half over the next 50 years.
How much is giving up your career to have a child worth? For South Korean construction company Booyoung Group, a $75,000 bonus, according to Fortune business magazine.
The Seoul-based company is giving away 100 million Korean won ($75,000) every time an employee has a child to help reverse the country's declining birthrate, and is even giving retroactive payments to those who started a family before the policy took effect.
“If the current situation of low birth rates persists, we will face a nationwide existential crisis such as a shrinking workforce and a shortage of personnel needed for national defense,” Lee Joong-keun, founder and chairman of Booyoung Group, said at a staff meeting, according to multiple reports
“The low birth rate is the result of financial burdens and difficulties in balancing work and family life, so we decided to take such a drastic measure,” he said.
In addition to giving a total of 7 billion Korean won ($5.25 million) to employees who had a total of 70 children from 2021, the construction giant's “drastic” measures include being able to cover the rent expenses of large families.
“If the land is provided by the government, employees with three or more children will be able to choose between a birth incentive equivalent to that of three newborns or a rental housing similar to social housing (without tax obligations or maintenance responsibilities),” added the 84-year-old billionaire.
Additionally, the company confirmed to CNN that this no-obligation benefit will be available to both male and female employees in its 2,500-strong workforce.
In addition to the birth incentive, Booyoung Group is already trying to ease the financial burden on parents by helping them with school fees for employees' children, medical expenses for immediate family members, and child allowances.
The head of the giant company also proposes that the state implement a new system of tax deductions to relieve profit and income tax, so that employees can fully benefit from parental incentives and more companies can follow suit.
South Korea's Falling Birth Rate Hurts Business
South Korea's government has already subsidized housing for newlyweds, given discounts for postpartum care to new mothers and even introduced a $2,250 “child payment” for each newborn, but this is not enough to persuade the country's severely declining population to have children.
The country currently has the lowest fertility rate in the world, with the number of children expected for a South Korean woman falling to 0.78 in 2022. Worryingly, this number is expected to drop even further to 0.65 in 2025. In comparison, experts say a rate of 2.1 is needed for a country to maintain a stable population without migration.
Now, South Korea's corporate giants are forced to step in and reverse a trend that could halve the country's workforce in 50 years: Samsung Electronics, LG Electronics and Hyundai have introduced various perks for children, including on-the-job childcare facilities, fertility benefits and even two years of parental leave.
But Booyoung Group is the first company to provide “substantial financial support” for each newborn, according to Korea JoongAng Daily.
The head of the company, a controversial character
Billionaire Joong-keun is a well-known philanthropist in South Korea. Last year, he donated more than $100 million in cash to his hometown residents and local school graduates.
Raised in poverty in a small rural village in Unpyeong-ri, Joong-keun reportedly wanted to express his “gratitude for the villagers' support,” including during his three years in prison.
The rags-to-riches entrepreneur's story took an unexpected turn in 2004 when he was accused of tax evasion and embezzlement of company funds.
In 2018, Joong-keun was arrested again on similar charges and released on parole in 2021. As a result of his sentence, Joong-keun was barred from working at any entity related to the source of his crime for five years, according to UPI News Korea.
Photo source: Dreamstime.com
