Hear the market shrieking?The November job data showed the youth jobless rate at 9.2 percent, the highest for the month since the data began being tracked in 1999. The real unemployment rate for the age group of 34 and under hit 21.4 percent when you take into account part-time workers and those between jobs. The data suggests one out of every five young Koreans is without a decent job.
In contrast, Japan Inc. has to fight to hire as it has an average 1.5 job openings for every applicant. The U.S. boasts near-perfect employment and has raised interest rates. The job boon is back because the two governments have radically removed regulations and cut corporate taxes to promote a benign business environment for investment and hiring.
President Moon Jae-in and his liberal government also vowed to deliver jobs and grow incomes. But its prescription went the entirely opposite direction as it trots out one anti-business action after another. Employers are arm-twisted to push up the minimum wage by double digits, put contract workers on the permanent payroll, expand workers’ base salary scope, scrap performance-based pay and dismissals, pay up more corporate taxes and cut their work hours.
They can hardly think of hiring when they should scale back for their increased labor costs. As a result, precarious jobs have become even more precarious. Employers are increasingly shedding their staff for cleaning and security, who have been paid on an hourly basis, ahead of the spike in minimum wage.
Meanwhile, the yawning stretch in household debt shows no sign of easing. Household debt increased by 10.1 trillion won ($9.2 billion) last month and is expected to hit 1,450 trillion won by the end of this month regardless of an expected hike in the base interest rate sooner or later.
Since jobs and income do not increase, consumers have to take out more loans. The economy moves on people’s sentiment.
The Moon Jae-in administration must stop and pay heed to the shrieking voices of the market before its anti-business policy causes lasting casualties on the economy.
JoongAng Ilbo, Dec. 14, Page 38