Raising GDP key to creating jobs: FKI

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Raising GDP key to creating jobs: FKI

Economic growth is the most important factor in creating jobs and narrowing the gap between rich and poor, a recent study indicated yesterday.
A 1 percent increase in GDP, the broadest measure of economic performance, could create 60,000 new jobs, accounting for 0.3 percent of all employees, according to the study released by the Federation of Korean Industries (FKI), which represents the interests of some 500 Korean businesses.

Korea’s GDP grew a revised 0.3 percent in the April-June period from three months earlier, down from an earlier estimate of 0.4 percent, according to the Bank of Korea.

The central bank earlier said that quarterly growth is likely to reach around 1 percent in the third and fourth quarters, leading full-year growth to reach 3 percent.

The study, conducted by Oh Jung-gun, an economics professor of Korea University, also showed that 50,000 out of 60,000 possible jobs are regular positions, while 10,000 others are either temporary or day laboring posts.
Still, a 1 percent increase in GDP could reduce the number of self-employed by 10,000, according to the study. Businesses run by the self-employed made up more than 80 percent of companies in Korea last year, according to Statistics Korea.

The FKI study also showed that a 1 percent increase in GDP could reduce the Gini coefficient index, a major tool to gauge wealth distribution, by 0.3 percent. Last year, the index edged up to 0.311 from 0.310 in 2011, indicating a wider income gap in Asia’s fourth-largest economy. The average Gini coefficient of a group of 34 wealthy nations was 0.31 at the end of the last decade, compared to 0.28 in the mid-1980s, according to data. The closer a reading is to 1, the greater the wealth imbalance.

Oh said the study illustrated that job creation through economic growth is important to ease social polarization.


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