Unemployment is the problemAnnouncing the direction of Next Year’s economic policy Wednesday, the Moon Jae-in administration declared that 2018 will be the first year of the era of $30,000 per capita income. But the government expects that only 320,000 jobs will be created during the year. That means it aims to maintain the current level of employment despite its full-fledged efforts to increase the budget for job creation, activate fiscal stimuli in the early stages and recruit more workers for the public sector than before.
As the government explains, the stagnant employment could be attributed to structural problems in our economy, including a continuous decline of our overall working age population and yet a dramatic increase of new job-seekers in the 25-29 age group, mostly children of the baby boom generation. When they enter the labor market en masse, it will surely fuel competition for jobs.
But we cannot entirely blame such structural factors for the sagging employment. The government must first consider what kind of impact its signature pro-labor union approach, such as the decision to sharply raise the minimum wage from next year, would have on creating new jobs as it hopes. Entrepreneurs can create quality jobs and make robust investments when the government encourages them with incentives. But the government has been backpedaling on the front, as seen in its decision to raise corporate taxes, for instance. It is regrettable for the administration to resort to a set of quick fixes to revitalize our economy.
The Moon administration underscored that it is determined to improve the quality and quantity of jobs as well as incomes to upgrade the quality of the people’s lives. It also vowed to aggressively tackle our alarmingly low birthrate, while accelerating so-called “innovative growth” to bolster out lethargic growth potential. We hope that the government keeps its promise to achieve tangible results by offering financial support to the promising sectors of self-driving cars and smart cities to drive innovative growth.
We welcome the government’s plan to pave the way for stable employment by bolstering unemployment benefits. But it must not make the mistake of sacrificing labor flexibility after focusing on employment security. The administration also announced that it will expand its mid-term budget plan to cope with the mid- and long-term challenges facing our economy, including the low birthrate. We also welcome it. But the government must not forget that if its expansionary budget fails to achieve the goal, future generations must bear the cost.
JoongAng Ilbo, Dec. 29, Page 34