The reform of South Korea's labor market is critical for long-term economic growth and can expand employment opportunities that benefit all sectors of society, the top economic policymaker said Wednesday.

Speaking at a job fair in Gwangju, 330 kilometers south of Seoul, Finance Minister Choi Kyung-hwan expressed concern that despite an agreement reached at the tripartite talks in September, conflicts of interest and divergent political agendas have prevented follow-up legislation from gaining speed.

Under the agreement reached by representatives from labor, management and government, employers will be permitted to fire underperforming workers and alter the rules of employment that may place employees at a disadvantage. Companies, in exchange, will be obliged to hire more full-time workers.

"South Korea's labor market is utterly outdated, resulting in a 'dual market' structure that has to be corrected," Choi said.

A dual labor market refers to the gap between full-time regular employees with stable jobs and non-regular workers who have far less job security and are paid less. The system has been cited for fueling unemployment among young people, who are hard pressed to find good paying jobs.

In September, the unemployment rate among people between the age of 15 through 29 reached 7.9 percent, which is 2.5 times higher than the national average of 3.2 percent.

Choi, who doubles as deputy prime minister in charge of economic affairs, said that while some people may object to reforms, they must realize change is essential if Asia's fourth-largest economy is to boost its growth potential that can allow companies to hire more workers.

 "This can lead to benefits for all people," he claimed.

He urged politicians, labor leaders and businesses to look upon labor reform in a broad light and exercise their leadership to push forward change.

In a separate meeting with owners of small and medium enterprises, Choi that there are many benefits to reducing the country's workweek, which can enhance quality of life and even lead to more hiring.

Last month, the ruling Saenuri Party announced a new labor reform bill, which calls for fewer working hours aimed at prodding both companies and workers to focus and get more work done quickly.

"Despite working longer hours compared to most other countries, South Korea's labor productivity remains low," the finance minister pointed out.

He, however, cautioned that trying to implement change too quickly can lead to serious fallout.

"The proposed bill calls for companies with more than 1,000 employees to reduce their work weeks starting in 2017, with companies that have between five to 99 workers implementing the change in 2020," the official said.

In response, entrepreneurs called on the government to include a special clause that will open up more flexibility in working hours, saying companies may find it hard to hire new employees even if the workweek is cut. (Yonhap)