This company is paying its workers €70,000 per baby to encourage them to have children

The incentive of giving €70,000 to employees of a South Korean company who have a child was designed to boost a falling birth rate.

A Korean construction company is paying its workers almost €70,000 every time they have a baby in the hopes it helps to tackle the country’s low birthrate problem.

The company has already paid a total of €4.8 million in a lump sum to employees who have given birth to children since 2021, including two families with two kids who received €138,000 each at a New Year’s staff meeting earlier this month.

“If the current state of low birthrates persists, we will face a national existential crisis such as workforce decline and a lack of defence manpower necessary for national security,” said Joong-keun Lee, the founder of Booyoung Group, at a staff meeting according to a press release.

South Korea has the world’s lowest fertility rate at some 0.7 births per fertile woman, according to the Korean Peninsula Population Institute for Future.

Experts say the reasons include changing views on family, a highly competitive society, the high cost of raising children, and men’s low involvement in childcare.

“Humans have two different instincts – one is to preserve their species and the other is to survive. Right now, survival is too challenging that we cannot afford to care about preservation,” Insill Yi, President of the Korean Peninsula Population Institute for Future and former Korean statistics commissioner, told Euronews Next.

Humans have two different instincts – one is to preserve their species and the other is to survive. Right now, survival is too challenging that we cannot afford to care about preservation.

Insill Yi President, Korean Peninsula Population Institute for Future

“To put it simply, the biggest factor is that it’s difficult to plan the future, which is necessary if you want children, because life is so challenging and competitive right now, and the future with children doesn’t feel so relevant to them”.

Experts predict that more and more companies will start such initiatives.

“One of the most important things for a company is labour, right? They may experience difficulties in recruiting employees, but another aspect is that consumers are disappearing,” said Yi.

“As the population decreases, I think companies are experiencing a sense of crisis. I think this is almost the beginning of companies starting to think, ‘What should we do?’ I believe that more companies will join this effort in the future”.

‘Thought about a second kid that we didn’t really plan’

One of the recipients of Booyoung’s new scheme says the money gave her peace of mind.

“If our baby wants to do something in future, we can support it without worrying about it,” Semi Hong, HR Manager at Booyoung Group, told Euronews Next.

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

“Even I have thought about a second kid that we didn’t really plan since this is an unconventional incentive policy. So I think many employees are reconsidering family planning,” said Hong.

“Perhaps those who were going to have just one kid will have two instead now”.

Offering as big a sum as Booyoung does is unprecedented, but reports suggest that several South Korean companies have recently introduced new schemes to encourage childbirth and provide employee welfare.

They believe the state’s cooperation is essential to give more support to their employees.

In the announcement of the new incentive, Booyoung promised that employees who give birth to their third child will be able to choose between cash for three children or permanent rental housing provided the State can give them the land to build.

The construction and property giant also suggested the state implement a new tax deduction system to waive corporate and income tax so the employees can receive full benefits of the parenting incentives and more companies can follow suit.

One-off bonus can’t solve every problem

Experts say work culture and fair division of parenting between women and men are also crucial.

“You know that raising that child is not something you do for just one day. It has to continue until the child becomes at least 20 years old, and the minimum cost of it including private tutoring is 200 to 300 million won [€138,000 to €208,000] per child in my opinion,” said Yi.

“I’ve asked young people if they would willingly have a child, and they said it would certainly provide financial support to them, and it is true that it would definitely have a positive impact if they stood at a crossroads of deciding whether or not to have a child,” Yi added.

“But they said they wouldn’t have a child just because of the money”.

Currently, in South Korea, women are mostly responsible for raising children, and the ratio of men helping with childcare is one of the lowest in the world, according to the expert.

The Korean Peninsula Population Institute for Future is campaigning to promote a work culture where employees can have kids without feeling pressure.

The country, which used to work the longest working hours a day among OECD member states, has slowed down, and young people are keen to achieve work-life balance.

Yi is optimistic that South Korea will see a change in population trends.

“I suppose people in Europe with little understanding about Korea may think ‘How can there be a country like this?’ But as an economist, I can say Korea has always been like this. This country achieved a lot of things in a short period,” she said.

“So I believe the same will happen for population problems. We are currently making various efforts from all walks of life and the government is also making efforts”.

“In the future, I believe and hope that many companies like Booyoung will make efforts and that we will make a society that is good for having and raising children,” she said.

For more on this story, watch the video in the media player above.