New jobs may have shrunk, says Kim

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New jobs may have shrunk, says Kim

Kim Dong-yeon, finance minister and deputy prime minister for the economy, acknowledged Tuesday that the number of newly employed people last month will shrink - a spectacular fall from just a few months ago - admitting the government’s failure to meet its promises to create jobs.

“We cannot exclude the possibility,” Kim said when asked by Liberty Korea Party lawmaker Kim Gwang-lim at the National Assembly if there was a possibility that the number of new hires could be less than zero, compared to 314,000 new hires a year ago.

“In the first half, only 140,000 new jobs were created,” Kim said. “As a person in charge of the nation’s economic management, I am ashamed and apologize to the people.”

The government had a goal of creating 320,000 jobs this year. However, the number of new hires has been falling sharply since February when it dropped to 100,000 more compared to a year earlier and further falling in July and August. In July, only 5,000 more new jobs were created, while in August it fell to 3,000, a stark contrast with the average of 300,000 jobs created every month last year.

The economy minister said while a large raise in the minimum wage and a law mandating a shorter work week had good intentions, the government does recognize the negative impact these had on the job market.

“Especially in August, the sharp drop of jobs in the service sector has been most painful,” Kim said. “Businesses that are most sensitive to the minimum wage increase are believed to have been [most] affected.”

Kim added that he is in talks with other economic ministers in considering a change in the course of the government’s job policies, adding that there’s a fierce debate within the government over the policies’ effect on the economy, even in front of President Moon Jae-in.

The low number of jobs created compared to a year ago wasn’t the only alarming figure. In August, the number of unemployed people rose to 1.13 million, the largest since the financial crisis of the late 1990s. Furthermore, the youth unemployment rate was at 10 percent while the number of people in their 40s that are employed dropped 158,000 year-on-year, the sharpest decline in 27 years.

“The biggest problem that our economy faces is the weakening of our potential growth as low growth is becoming permanent,” Kim said. “[The government] will soon announce a comprehensive industrial structure reform plan related to the traditional manufacturing industries including shipbuilding, automobiles, petroleum and steel.”

While Kim has repeatedly raised the need to reconsider Moon’s so-called income-led growth policies and the hiking up of the minimum wage, the Blue House has asked the public to be patient and wait for the policies to have a positive impact by the end of the year. The Blue House has argued that changing demographics and the current economic situation were the main factors contributing to the poor jobs figures.

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