Putting the cart before the horsePresident Moon Jae-in’s approval rating plunged to 61.7 percent this week, according to the most recent Realmeter poll, sinking 6.4 percentage points in one week to its lowest level since January. Until now, Moon had enjoyed an unprecedented level of popularity for a Korean president in his second year.
The polling firm cited slow progress in denuclearization talks with North Korea and businesses’ dissatisfaction with the steep minimum wage increase. The approval rating among self-employed people fell 12.2 percentage points from the previous week, and the working class, disgruntled by the government’s economic policies, is turning its back on the president.
The Moon administration pledged to generate growth by raising incomes and encouraging innovation, but the government recently lowered its estimate for GDP growth this year to 2.9 percent from 3 percent, and job growth stopped at 140,000 per month on average this year.
The economy is losing steam, but the government’s proposal for increased fiscal spending is simply a makeshift measure. The liberals want higher taxes to finance more spending, but that would fan doom for the ruling party if it pressures voters to contribute more during an economic downturn.
Some liberal professors and activists have criticized the slow pace of the government’s income-led growth policy. The malaise will worsen if the wrong cure is recklessly prescribed. The economy must grow to generate growth for companies and individuals. The government is putting the cart before the horse if it believes growth is possible through increased fiscal spending.
The government needs to change its policy direction. If it pushes ahead on the current path, Moon’s approval rating could continue to fall, and the policies could damage the people and national economy. The government must expedite deregulation and enact labor reforms that allow companies to be more flexible in spending and hiring. That is the only way to raise growth and income.
On Thursday, Moon promised to accelerate the government’s growth drive. Removing outdated and unnecessary regulations on medical devices will be the start of that campaign. The president must see through his promise with action.
Korea’s job market requires an urgent overhaul. It is severely polarized, with job security restricted to the unions of large companies, making opportunities scarce for young people. These unions must surrender their vested power.
The liberal government is the best candidate to persuade the unions. Reforms in Germany were carried out under a socialist party, and French President Emmanuel Macron, once a socialist, has been leading sweeping reforms and reviving his country’s economy.
JoongAng Ilbo, July 20, Page 30