The jobs debacle

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The jobs debacle

The number of new jobs in July was only 5,000, the lowest number since the 2007-2008 global financial meltdown. Last year, the average monthly gain was 300,000 jobs. The number of unemployed has been hovering over one million for seven consecutive months this year. These figures are particularly depressing when compared to the near full-employment in the United States and almost as good performances in other developed countries.

The Moon Jae-in administration inevitably will have to answer for the catastrophe it has caused on the jobs front. Increasing jobs was, in fact, the president’s top priority. The first thing he did after moving into the Blue House in May last year was create a presidential committee devoted to boosting employment. For the singular goal of raising job employment, the government forced the upgrade of contract workers to permanent payrolls and vowed to deliver an hourly minimum wage of 10,000 won ($8.90) within three years.

Fiscal spending devoted to job creation hit 54 trillion won — 17 trillion won last year and another 19 trillion for this year plus an additional 15 trillion won through two supplementary budgets and 3 trillion won in subsidies for small employers to ease the burden from the double-digit hikes in the minimum wage. A colossal amount of money has been spent to create jobs, and yet, the result was the opposite.

As many as 181,000 jobs were lost in the wholesale, retail, lodging, restaurant, maintenance and lease services sector, which often pay on an hourly basis. Shopkeepers sacked employees and closed stores because they no longer were able to sustain their businesses. The manufacturing sector also suffered and shed 127,000 jobs. Of the core working population — people in their 30s and 40s — 239,000 became jobless.

This dire situation could worsen. If the 16.4 percent hike in this year’s minimum wage was such a trainwreck, the 10.9 percent increase already planned for next year may wipe out more businesses and jobs. The universal enforcement of a 52-hour workweek since July may also take a heavy toll on jobs.

The government remains defensive of its policy and is trying to find other factors to blame — the unprecedentedly hot summer or an overcrowded wholesale and retail sector. The administration must slam on the brakes and turn to an entirely new direction. Moon — who vowed to be a president that gave Koreans jobs — must personally spearhead the job-saving campaign.

JoongAng Ilbo, Aug. 18, Page 34
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