New marching orders neededThere is no denying the catastrophic employment situation under the Moon Jae-in administration. The October jobs data released on Wednesday showed the number of unemployed surging by nearly 80,000 year-on-year to 973,000 last month, a level last seen in October 1999 when the country suffered massive layoffs in the 1997 Asian economy crisis.
The unemployment rate hit 3.5 percent, the highest October figure in 13 years. The employment rate has fallen for nine straight months, the longest losing streak since the crisis period in the late 1990s. Payroll additions slightly improved to 64,000 from the previous month but remained below 100,000 for the fourth month. The job additions were mostly in part time work created by record fiscal spending. The data suggested that jobs were bolstered by public spending while the corporate sector continued to reduce hires after labor costs surged under Moon’s income-led growth policy. The health and social welfare services sector added 159,000 jobs in October, the result of heavy budgetary spending. Jobs in the wholesale, retail, lodging and restaurants, maintenance and rental services sectors — whose labor is paid levels around the minimum wage — were shaved by 286,000. That underscored that the weakest rung in the social ladder — mom-and-pop shops and temporary hires — bore the biggest brunt of the minimum wage shock.
The government refuses to take remedial actions to address its policy failures. In a recent address to the National Assembly, Moon pledged to uphold his income-led growth policy. The new commanders of economy policies — Finance Minister-nominee Hong Nam-ki and Kim Soo-hyun, the president’s policy chief — echoed the president’s stance. Concerns about the disastrous policy have been raised overseas. While delivering grim growth estimates for the Korean economy of 2.5 percent for this year and 2.3 percent next year, Moody’s Investor Service cited policy uncertainties. It predicted that the economy will underperform its peers. It pointed out that business-unfriendly policies like the hikes in the minimum wage, a cutback in legal work hours and a spike in corporate taxes coupled with external factors have worked negatively on growth and jobs.
Hong said he would reflect the urgent need to bolster jobs in next year’s economic policy. But without giving up on a fundamentally disastrous policy, spending will probably be wasted. The government should come up with effective ways to revitalize the business sector to create jobs. As a candidate, Moon vowed that creating decent jobs was his top priority. He has done the reverse: he’s killed decent jobs. He has replaced his commanders on the economic front. New faces won’t do any good if they are given the same commands from on high.
JoongAng Ilbo, Nov. 15, Page 30