[EDITORIALS]The best welfare? Good jobsThe introduction of an earned income tax credit, which will give lower-income families incentives to work harder and get more benefits from the government, is an idea that is gaining momentum.
The current system of providing minimum livelihood payments to the destitute is helpful in alleviating poverty, but it has the down side of removing any motivation to look for a job. To address this flaw in our welfare system, the tax credit attempts to link welfare and inducements to employment. This negative income tax has been implemented in the United States and other advanced nations, and has the effect of spurring the economy, expanding social welfare and, in the long run, decreasing the financial burden on the government if the system is implemented well.
The problem in the current system is in accurately assessing incomes. People who want to keep their government support report incomes lower than their true wages, and non-working spouses report bogus divorces to get on the welfare rolls. If the government cannot assess the actual income of those who fall under this system, it can lead to serious loopholes where people take advantage of support by false information.
Our tax management system is far from perfect, and the tax credits would require an additional budget of 2 trillion to 4 trillion won ($3.6 billion). Our present welfare budget is less than 4 trillion won. It is unclear how the government could get the additional funds.
The more intrinsic problem lies in employment: if there are no jobs available for the destitute, they cannot expect any relief from the new system. The government said it would invest 1 trillion won to support “escape poverty through work” plan, and would create 50,000 new jobs in the public sector. These are temporary, stopgap measures. Instead of perfunctory employment, jobs should be created for the sake of enhancing productivity.
Jobs should be created in the private sector. Jobs created in the public sector using tax money are not productive. Investment in the private sector should revive, factories run and the economy recover. If not, the system will incur enormous debts and become another black hole while the vicious cycle of poverty continues.
In sum, welfare depends on jobs. Jobs provide individual income, self-pride and social linkages. The best welfare is providing jobs.