Whose rage is it now?
The author is an editorial writer at the JoongAng Ilbo.
Another one bites the dust. A friend of mine lost his job at a small company. He asked for my name card. He said he has to write down job-seeking activities in order to become eligible for a 1.5 million won ($1,347) monthly state subsidy for the jobless. The job crisis is not just a statistic or a headline. It has become reality.
In July alone, 1 million people lost their jobs and 445,000 took 580 billion won worth of handouts from the government in unemployment benefits. All the incoming data points — on jobs, consumption and investment — have worsened to crisis levels. Restaurant help, apartment security guards and part-time work for students have become scarce. The so-called income-led growth policy has landed squarely on the heads of the poor. The government proposed to raise unemployment benefits by 1 trillion won from this year to 7.4 trillion won in next year’s budget. We all may be frogs slowly dying in boiling water.
Why is the government so defensive about the income-led growth policy? I looked up the book “Why We Must Rage” written by Jang Ha-sung, the president’s policy chief, in 2015. The progressive economist passionately dissects inequalities across Korean society in the 400-page book. He concludes that a failure in wage distribution is the cause of inequalities. “The unfair structure cannot be fixed without revolutionary innovation, and we must rage at the injustice,” he writes in his conclusion.
His last words stuck in my head as his beliefs and passions are being put into practice. He rejected the trickle-down theory, which says that when large corporations and wealthy people become richer, the benefits spill over to smaller enterprises and the common folk. This delusion, he claimed, has widened the wage gap between large and smaller companies and between the permanent and irregular labor forces to make Korea one of the most unequal societies in the world. If there is no income, there cannot be growth in consumption, demand and investment. He argues that this is why the wages of people on the bottom rung must be hoisted up. Hikes in the minimum wage is the starting point of the trickle-up theory.
The theory finds fault mostly with large companies for keeping the fruits of prosperity to themselves. It wants wealthy companies to dig into their bulging cash hoards and share some of the riches with smaller players in the supply chain. It also proposes the principle of paying the same wage for the same labor to reduce the gap between regular and contract workers and mandate hires on a permanent basis. It does not believe in companies’ voluntary contributions to fairer distribution and argues for forced commitments. Regulation may be another means as President Moon Jae-in said the minimum wage was just one of the policy tools for the income-led growth policy. Arm-twisting could come next.
The Jang experiment has been disastrous. In theory, it was ideal, but data tells it is not in real life. Jang is not discouraged. Moon told the government to defend the policy. But compared to 65 trillion won spending on the policy, pride is also at stake. Jang or other senior members can be replaced, but the losses cannot be easily compensated.
We must rage against theorists conducting experiments on our very livelihoods. Taxpayers have every right to question the spending if their valuable money is spent on projects that could be wasted. If the stakes are too dear, one must stop gambling. Somebody must tell them they are wrong for trying to fix data that does not please them. Why do we rage? It is their turn to answer.
JoongAng Ilbo, Aug. 31, Page 31
More in Columns
Who’s laughing now?
Fighting Chinese patriotism
The curse of the presidency
You must talk science
[20th Anniversary] A new form of globalism is on the rise