Create good jobs in private sectorFollowing the welfare sector, increasing spending to stimulate employment is the next biggest priority in next year’s budget proposal. The government proposes earmarking 11.804 trillion won ($10.988 billion) to promote hiring, up 7.7 percent from this year’s 842.2 billion won. The government aims to pump in funds to raise the current employment rate of 64.6 percent by 1 percent next year as a part of its desperate efforts to meet President Park Geun-hye’s promise to attain an employment rate of 70 percent by the end of her five-year term.
But government-led hiring tends to be part-time, insecure and unsustainable over the long haul and can only undermine the job market. If the government is too obsessed with statistics, it may end up mass-producing jobs that do not offer decent pay or security at the expense of the taxpayers. What the government is asking is for the public and businesses to foot the bill not only for extra welfare programs, but also for new jobs. If the government takes such a path, it will most likely exhaust its budget resources.
Needless to say, jobs should be created primarily by the private sector, not the government. Hiring naturally follows when companies increase investment and the economy flourishes. It just doesn’t make economic sense for the government to pump in tax money to create hiring.
Given the intense pressure to meet the goal of 70 percent employment, various government offices are promising public-sector jobs and adding questionable budgetary projects to increase hiring. Heavy spending would also go to promoting a salary peak system, in which senior members can settle for a cut in salary in return for a lengthened work period, even though it is no longer effective after the retirement age has been pushed back. The government also set aside spending to increase part-time jobs that are widely opposed due to their lack of security. The government-led job increase could end up being a waste of public funds and hurting the job market.
President Park also said the employment goal cannot be reached only through the government’s efforts. Employment policy should be focused to generate jobs. But a number target should not be the primary goal. What the government should do is promote corporate activities and investment to create decent jobs in the private sector.