Study says government jobs policy not working

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Study says government jobs policy not working

Job creation has been the least effective economic policy during the four years of the Lee Myung-bak administration, according to a government report.

The report by the Korea Development Institute (KDI), a state-run think tank, challenges the government’s position that its policies have had a beneficial impact on the country’s joblessness.

The institute report released yesterday surveyed 261 economic experts and 1,000 ordinary citizens about the legacy of the current government.

The KDI and Statistics Korea have been at odds since a KDI researcher asserted last year that the government’s statistics agency’s methods did not accurately reflect the reality of the labor market.

The KDI report said that despite ramped up efforts to address unemployment, most policies have not been effective.

This year, the Ministry of Strategy and Finance increased tax incentives for companies that add new jobs, saying it would put more emphasis on job creation in the final year of President Lee’s term.

The KDI report came as the ministry prepared to unveil its jobs policy package for the second half of the year today.

A total of 10.1 trillion won ($8.7 billion) was earmarked for jobs in the government budget for 2012.

However, the experts surveyed criticized giving financial benefits for companies in return for creating jobs.

“Small companies intentionally add simple and temporary jobs to receive tax incentives from the government, hindering growth of the overall economy,” the report said.

The experts also cited increasing competition between youths and senior citizens for available jobs as a serious social problem, a position echoed by more than 86 percent of the citizens who participated in the survey.

Suh Ji-ah, a 46-year-old woman who runs a convenience store in Seongnam, Gyeonggi, said she prefers older people when hiring part-time employees.

“More elderly people are applying for a part-time position at our store than before, crowding out young people,” Suh said.

The report identifies other areas in which government policy has been less effective that hoped, including managing inflation, assistance for the working class and narrowing the balance of payments .

Nearly half of those surveyed said the Lee administration’s most effective policy has been elevating the country’s international status by hosting Group of 20 Seoul Summit in 2010.

The government also was commended by 37 percent of those surveyed for expanding the number of free trade partners, which was seen as the second-most successful policy area.

The Lee government signed a total of 10 FTAs, including the latest deal with Colombia.

By Song Su-hyun [ssh@joongang.co.kr]

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