Before it’s too lateEmployment numbers stood at 27.06 million in May, adding 72,000 from a year ago, according to data released by Statistics Korea Friday. The addition is the smallest amount since January 2010 when the number of jobless declined by 10,000.
The job addition numbers that have been hovering below the 200,000 threshold since February continue to lose ground. The last time payroll growth declined below 200,000 for four straight months was in the aftermath of 1998 financial crisis when the country went under an across-the-board restructuring in return for an international bailout.
The dramatic shift of raising the minimum wage by double digits and cutting legal work hours to generate income growth has taken a serious toll on the employment front.
In an emergency cabinet meeting, Finance Minister Kim Dong-yeon called the May job data “shocking” and said the entire economic team must share the responsibility. Job data could not be worse.
Unemployment grew 120,000 to 1.12 million to generate a jobless rate of 4 percent for the broad working population and 10.5 percent for the under-30 age group, both at their highest since data started being compiled in May 2000.
When counting the number of people between jobs, the youth jobless rate hits 23.2 percent, meaning one out of every four people under 30 is without a job. The jobless rate in the United States during the Great Depression in the 1930s was 25 percent.
The sudden spike in the minimum wage from January must have played a part in this phenomenon as many research institutions have pointed out.
The Blue House refuses to accept the side effects, claiming a 90 percent positive effect due to the higher minimum wage. It must face the music before the crisis becomes beyond remedy.
The government must remove regulations and become more market- and corporate-friendly to stimulate the business and investment environment. Kim must use his office to undo the wrongs from this income-led growth policy before it wrecks the economy.
JoongAng Sunday, June 16, Page 34