Jobs aren’t getting any betterThe job situation shows little sign of improving. According to the latest job data from Statistics Korea, the addition to jobs against a year-ago period was only 45,000 in September. Payroll growth has hovered below 100,000 since February after the minimum wage went up by double digits in January. The catastrophe of those figures is obviously when you realize the average monthly number of new jobs last year was around 300,000. September actually wasn’t as bad as the months that preceded it due to temporary hires for the Chuseok holiday, a traditional time for Koreans to exchange gifts. The number of unemployed stayed above 1 million for the ninth straight month. In the wholesale, retail, lodging, and restaurant sectors — which mostly pay the minimum wage — 316,000 jobs were lost. As many as 227,000 people at the peak working age of the 30s and 40s found themselves out of job this year.
The government has been pressing public companies to employ temps. Such makeshift action is no more than window-dressing. More fundamental steps are needed. The government knows the solution all too well. President Moon Jae-in attended a groundbreaking ceremony for a new SK Hynix chipmaking facility and said the government must extend customized services to assist companies. To stimulate companies to invest and ultimately create jobs, authorities must do away with regulations and allow flexibility in the labor market instead of meddling in corporate management. Exporters are already hard-up with the escalating trade war between the U.S. and China and volatility of capital leaving emerging markets. The domestic environment must become more friendly.
The minimum wage policy has wrecked the lives of self-employed people and mom and pop shops and must be fixed. Moderation is needed in the pace of increases as well as differentiation of rates by industry and location. More fundamentally, the government must shake out of its obsessive insistence on its so-called income-led growth policy. The government claims growing pain is inevitable in the process of changing the economic paradigm. But most economists agree that fundamentals have weakened due an untested economic policy. As long as authorities press on with their unjustifiable economic experiment, Korea will pull itself out of a job slump.
JoongAng Sunday, Oct. 13, Page 34