Hiding behind figuresThe Blue House keeps repeating the same line: the economy is getting better, but more patience is required. In a speech at the Democratic Party convention on Saturday, President Moon Jae-in claimed that employment data showed the quality and quantity of jobs is improving. The economy is growing at a faster pace than under the previous government and overall income has risen, he said.
Moon has not only misinterpreted the data, he has also gotten the facts wrong. There were 5,000 jobs added in July against a year ago, compared to month-on-month growth of more than 300,000 jobs on average throughout last year. The number of workers in stable, permanent positions also fell by 128,000 from last year. Many small businesses reported new hires in order to receive state subsidies for them, but in reality, the number of jobs at small businesses has not increased.
The president was most misinformed about improvements in income. The wealth gap actually widened because the poor got poorer and the rich got richer as a result of the steep rise in minimum wage. But Moon came to the self-serving conclusion that the government was steering the economy in the right direction.
His policy chief, Jang Ha-sung, is equally self-righteous. He pointed to a slower rise in household income vis-à-vis corporate income to justify the need to push ahead with worker-friendly policies. The share of household income against gross national income fell to 61.3 percent in 2017 from 67.9 percent in 2000, while the share of corporate income rose from 17.6 percent to 24.5 percent, he said. But he did not take into account the fact that capital investment made by companies loses its value over time. His interpretation that corporate income has gotten fatter leaves out this factor of depreciation.
Statistics serve as the scoreboard for public policies of the past and guidance for the future. Arguing that the economy is getting better when data shows otherwise can suggest more difficulties down the road. The president dismissed the director of the statistics office after he was reprimanded by Jang for publishing a report that said first-quarter household income was the worst ever. Kang Shin-wook, a senior researcher at the Korea Institute for Health and Social Affairs, is replacing her.
Kang openly supports Moon’s income-led growth drive. His predecessor said she did not know why she was sacked but said she was not someone who blindly followed orders. With a more obedient director at the helm, can the public believe the data that the statistics office releases?
JoongAng Ilbo, Aug. 28, Page 30