Turning point neededToday’s Blue House meeting aimed at devising strategies for growth through innovation holds the key to the success of President Moon Jae-in’s economic policy. If successful, the meeting could offer a breakthrough in its lackluster achievements so far. Despite his glitzy goals of revitalizing the economy by creating more jobs, income-driven growth, fairer distribution of wealth and innovative growth, the results are disappointing as seen in the soaring jobless rate — a whopping 22 percent — for the young generation. Except for robust performances by the semiconductors and petrochemical industries, our economy still faces a bumpy road ahead.
Above all, the buzz word “income-led growth” has suddenly disappeared. The government’s pressure on companies to rapidly raise wages, readjust their base salary and put their contract workers on the permanent payroll only led them to lay off employees and scale down investments. The labor market is under severe distress from the administration’s heavy-handed push for wage hikes. 90 percent of mom and pop stores across the country say that they would save their labor costs first.
Participants at the Blue House meeting must confront such gloomy realities. The government’s bold economic agenda can hardly work miracles due to the huge burden our corporate sector has to bear down the road. Entrepreneurs can hardly afford to consider investment and employment when the government is only bent on forcing them to follow its commands.
The government must learn lessons from the United States and Japan. In the United States, there is no discrimination between existing industries and new enterprises. Businesses are allowed to do whatever they want, except for a few exceptions. As a result, the U.S. economy can adapt remarkably. The top 10 listed companies on the New York Stock Exchange have been replaced with tech companies such as Facebook, Apple, Google and Amazon.
In Japan, too, its flagship companies in electronics are recovering thanks to four years of tough restructuring. As a result, the Nikkei Index has climbed to the level it was at shortly before the Bubble Burst two decades ago, and companies are looking for workers.
Korea must follow such a track to rejuvenate our economy. Top priority should be put on deregulation. Interest groups and civic groups must not hamper the recovery. As other countries develop cutting-edge industries through the fusion of fintech, Big Data and AI, we cannot lag behind because of their selfishness.
JoongAng Ilbo, Nov. 28, Page 34