These companies are offering employees $75,000 each time they have a baby to fix a major problem

South Korean conglomerates are offering generous birth incentive programs to their workers to help boost the country’s record-low fertility rate. Construction firm Booyong Group and underwear maker Ssang Bang Wool have announced incentives of up to 100 million Korean won or $75,000 to employees who have more children. While the companies have outlined the structure of the incentives, workers are skeptical if the monetary benefit alone is sufficient, The Korea Herald reported.

Here's how the incentives work

Booyoung Group, which is based in Seoul, stated in a press release that the cash incentive will be available for both men and women each time they have a baby. The group’s Chairman Lee Joong-keun said that “direct financial support” is given to employees to help ease the monetary burden of raising children.

The company said that workers with three babies would be given the option to receive 300 million Korean won or $225,000 in cash or rental housing if the government provides them with land for construction. 

The company further stated that it plans to pay 7 billion Korean won ($5.25 million) in cash to employees of the firm who have had 70 babies since 2021, CNN reported. 

After Booyong's announcement, Ssang Bang Wool announced that it would also provide monetary incentives to its employees for having babies. Under the company's scheme, a worker will get 30 million Korean Won ($22,400) for their first child, and for the second they can get another 30 million Korean Won. Further, for the third child, employees can pay an additional 40 million Korean Won ($30,000).  In its release, the company further stated that it would pay 3 million Korean won (~$2,200) to employees who need in vitro fertilization.

South Korea's ailing birth rate

South Korea is witnessing a deep demographic crisis with its low fertility rate. As per The Guardian, the country's birth rate is already the world’s lowest as it dropped to a new record low of 0.72 in 2023. Despite the government's efforts and billions of dollars in incentives, the country has not been able to force an improvement.

As per a government report, South Korea’s population shrunk for the fourth consecutive year in 2023. The birth rate is well below the average rate of 2.1 children, which the country needs to maintain its current population of 51 million. 

Apart from firms, the Korean government has also been supporting families with birth incentive programs. Earlier this year, President Yoon Suk Yeol, said that his administration plans to tackle the "national emergency" and create a new government ministry called the 'Ministry of Low Birth Rate Counter-planning', CNN reported.

President Suk Yeol has also instructed his aides to provide tax benefits and other support measures to encourage companies to introduce and run their birth incentive programs.

Despite the joint public-private efforts, workers remain skeptical about whether the monetary benefits alone can make a difference. Workers told The Korea Herald that employees currently feel guilty about using full parental leave and policies that provide flexible hours are still absent. 

Furthermore, some have raised concerns about the benefits not reaching enough workers. As per the  National Tax Service, only 2.3% of the country's workforce has received financial support from the birth incentive programs.