Business
The billionaire boss of a South Korean construction company Booyoung Group is encouraging his workers to have children with a $75,000 bonus
How much is putting your career aside to have a baby worth? A $75,000 bonus, at the South Korean construction company Booyoung Group.
The Seoul-based firm is handing out 100 million Korean won ($75,000) each time an employee has a baby to help reverse the country’s declining birth rate—and it’s even backdating payments to those who started a family before the policy came into place.
“If the current state of low birth rates persists, we will face a national existential crisis such as workforce decline and a lack of defense manpower necessary for national security,” Lee Joong-keun, the founder and chairman of Booyoung Group, said at a staff meeting, according to multiple reports.
“The low birth rate results from financial burdens and difficulties in balancing work and family life, so we decided to take such a drastic measure.”
As well as awarding a total of 7 billion Korean won ($5.25 million) to employees who collectively had 70 babies since 2021, the construction giant’s “drastic” measures include potentially footing the bill for larger families’ rent.
“If land is provided by the government, for employees with three or more children, we’ll let them choose between a childbirth incentive equivalent for three newborns or a public-housing-like rental home [with no tenant tax burden or maintenance responsibilities],” the 84-year-old billionaire added.
What’s more, the no-strings-attached benefit will be available to both male and female employees at its 2,500-strong workforce, the company confirmed to CNN.
In addition to the childbirth incentive, Booyoung Group is reportedly already trying to ease the financial burden on parents by helping out with college tuition for employees’ children, medical expenses for direct family members, and child allowances.
On top of that, Joong-keun is proposing 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.
South Korea’s falling birth rate is bad for business
South Korea’s government has already subsidized housing for newlyweds, discounted postpartum care for new mothers, and even introduced a “baby payment” of $2,250 for each newborn—but it’s not enough to convince the country’s severely declining population to have kids.
The country currently has the world’s lowest fertility rate, with the number of babies expected per South Korean woman dropping to 0.78 in 2022. Worryingly, that figure is expected to fall further to 0.65 in 2025.
In comparison, experts say that a rate of 2.1 is needed for a country to maintain a stable population without migration.
Now South Korea’s corporate giants are being forced to step in and reverse the trend that could see the country’s workforce halve within 50 years: Samsung Electronics, LG Electronics, and Hyundai have introduced various kid-friendly perks including onsite daycare facilities, fertility benefits, and even two years of parental leave.
But Booyoung Group is the first company to provide “substantial cash support” for every newborn, according to Korea JoongAng Daily.
The benevolent billionaire has served jail time
This isn’t the first time that Joong-keun—who is credited with introducing rental housing in South Korea—has made headlines for generously handing out cash to people.
Last year, the billionaire gave more than $100 million in cash to residents of his hometown and alumni of its local school.
Having grown up in poverty in the small rural village of Unpyeong-ri, Joong-keun reportedly wanted to express his “thanks to the support of villagers,” including during his three-year stint in prison.
The entrepreneur’s rags-to-riches story took a dark turn in 2004 when he was charged with tax evasion and embezzling company funds.
In 2018, Joong-keun was once again arrested on similar charges and released on parole in 2021.
As a result of his sentence, Joong-keun has been barred for five years from working at any entity connected with the source of his crime, according to UPI News Korea—meaning that he technically will not be allowed to lead Booyoung again until early 2027.
A version of this story originally published on Fortune.com on February 26, 2024.
