The experiment must endAnother despondent job scorecard has been delivered to the Korean economy. According to Statistics Korea, the number of employed increased by 3,000 in August over a year. It is the worst payroll data since jobs contracted by 10,000 in January 2010 in the spillover from the 2008-2009 global financial crisis. There is no denying it — the jobs front has become catastrophic.
The number of people who call themselves jobless reached 1,133,000, and the jobless rate for those between 15 to 29 years old hit 10 percent in August — both figures are the worst since 1999 when the country was grappling with industry-wide restructuring in return for an international bailout to avoid a national default. For those in their 40s, as many as 158,000 were out of job, a record next to 259,000 losses in December 1991, when the global economy was in a recession due to the Gulf War.
The harm from the spike in the minimum wage is loud and clear. From wholesale, retail, lodging, restaurant, and building maintenance sectors, which pay workers by an hourly minimum wage, 319,000 jobs were wiped out. The jump in youth unemployment also can be attributed to scarcity in part-time jobs in shops as the result of higher wages. Presidential policy chief Jang Ha-sung can no longer blame the job slump on demographic factors. He pointed to steady employment rate to claim the job market was not as bad as it showed. But the employment rate dropped again in August. In a recent report, state think tank Korea Development Institute said demographic factors cannot explain the sharp slowdown in the employed population. The statistical office made the same comment on the August data. Deputy Prime Minister Kim Dong-yeon admitted some policies — namely, the minimum wage jump — could have hurt jobs
The Blue House alone is in denial. Presidential spokesman Kim Eui-kyeom said job losses are inevitable pains in the process of a paradigm change in the economy. Jobs are dwindling fast with the leadership in collective rejection of any attack on its unorthodox policy path. Fintech and future technology companies have deserted their regulation-heavy home turf and are mostly engaged overseas.
President Moon Jae-in ordered his economic team members to put their own jobs on the line to save the job front. But as long as the government is mired in the income-led growth dogma, jobs cannot be created or saved. Sacking government officials will be of little relief to ordinary folks.
JoongAng Ilbo, Sept. 13, Page 34