The data does not lieJobs are decreasing fast in the three categories of manufacturing, retail and wholesale, and lodging and restaurants. According to Sunday’s data from Statistics Korea, the average number of hires in these three major job fronts from January through October was a mere 10.48 million, down 163,700 from the same period last year. The simultaneous nosedive in the big three categories is the first of its kind since the national statistics office started to gather data in 2013.
Lodging and restaurants, in particular, is crossing the so-called “valley of death.” As a result of the pro-labor Moon Jae-in administration’s push for an increase to the minimum wage in January, struggling mom-and-pop stores with no employees began to shut down their businesses en masse beginning early this year. Small business owners with a handful of employees began to lay them off due to their mounting labor costs. That caused the number of new hires in the lodging and restaurant sector to decrease by 97,000 last month compared to a year ago.
That’s negative growth across 17 consecutive months — the longest losing streak ever recorded by Statistics Korea. The dramatic fall in the number of jobs in the three sectors is obviously related to the government’s relentless income-led growth policy, an untested economic concept based on the belief that a government can spur demand by raising the minimum wage for low-income people.
Nevertheless, the Moon administration has been shying away from trying to find real reasons for the poor scores on the job front, despite vowing to create more jobs. It is bent on presenting a rosy analysis of the picture. After the average number of monthly new hires plunged to 3,000 this year from 310,000 last year, the government attributed the fall to seasonal factors, demographic change and a decreasing number of Chinese tourists. After Chinese tourists began to rebound, the government blamed the poor results on “overheated competition among the self-employed.”
The administration’s portrayal of our gloomy employment situation as “being on a recovery path” does not make sense at all. It bases its arguments on the rapidly increasing number of jobs in the public sector. But that is totally misleading, because jobs increased in the sector thanks to the government’s massive spending. The youth employment rate, which seems to be improving, is just an illusion, as young people are trying to get two jobs due to pay cuts and the newly-enforced 52 workweek.
Statistics do not lie. It is time for the administration to find real solutions to slow the pace of its minimum wage hikes.
JoongAng Ilbo, Nov. 19, Page 30