Critics fact-check Moon’s optimistic commentsPresident Moon Jae-in raised eyebrows during his New Year’s press conference with some of his statements on the economy.
Although he said the government was ashamed about the lack of economic achievements, he noted that income-led growth policies have had some positive effects.
“Overall household income has gone up and the number of salaried employees has increased,” Moon said. “Additionally, the ratio of low-income workers has shrunk, and recently, youth employment has improved significantly, with the youth employment rate reaching an all-time record.”
Salaried workers have job security and good benefits.
Moon’s comments echoed the sentiments of Finance Minister Hong Nam-ki.
“While by the number of jobs, it’s unsatisfactory, there have been some positive signs,” Finance Minister Hong said on Wednesday after Statistics Korea released last year’s jobs report. The report showed that the increase in total employment was the lowest since 2009 and the unemployment rate was at its highest in 17 years.
By some measures, Moon’s statements about improvements do hold up. According to Statistics Korea, both the average real and the nominal income of households with two or more family members did go up in the first three quarters of last year.
But when breaking down figures by income, the situation is different.
Households in the lowest 40 percent income category experienced a decline in income. Those in the top 40 percent experienced a rise in income. In the middle 20 percent, incomes have both gone up and down.
In Korea overall, average disposable income, which is income minus loan interest payments, social insurance and taxes, has been shrinking. In the first quarter of 2018, disposable income averaged 3.85 million won ($3,450). By the third quarter, the same disposable income was 3.76 million won.
“President Moon was only half right,” said Choo Kyung-ho, opposition Liberty Korea Party lawmaker. “I can’t help but to suspect the Blue House aides are reporting only positive statistics to the president.”
The president’s comments about the hiring of regular workers needs context and may not be as impressive as the numbers first suggest.
It is true that the number of temporary contract workers fell 2.8 percent, or 141,000, compared to the previous year, and the number of day-to-day hires dropped 3.6 percent, by 54,000. During the same period, the number of regular workers increased 2.6 percent, by 345,000.
“Regular positions are good jobs compared to contract jobs or day-to-day jobs as they receive higher pay and have better job security,” said Hwang In-woong, economic policy director at the Finance Ministry.
But the shift to regular employment is nothing new and may have actually slowed in 2018. A total of 366,000 regular jobs were added in 2017, so the 2018 figure is a decline.
As well, the definition used by Statistics Korea for a regular employee doesn’t mean a permanent job. It means a job in which the contract is longer than one year. Part-time employees working for more than a year are also regular workers. Regular employment is not always a good job.
“In order to evaluate whether the job quality has improved or not, one shouldn’t just look into whether the number of regular employees has gone up but also consider other factors, such as wage conditions and the details of the employment contract,” said Seong Jae-min, Korea Labor Institute researcher.
President Moon claimed during the press conference that the youth employment rate has improved sharply. While it did improve compared to the previous year, it wasn’t a significant change.
Last year, the employment rate of the productive population was the same as in 2017, at 66.6 percent. The youth employment rate, of those aged between 15 and 29, was 42.7 percent, up 0.6 percentage points from 2017.
But the youth employment rate has been steadily rising over the past few years. It was 40.5 percent in 2014, 41.2 percent in 2015 and 41.7 percent in 2016.
While youth unemployment went down 0.3 percentage points compared to the previous year to 9.5 percent, this, too, may not be reason for optimism. If youth unemployment includes those who have given up finding work and those who haven’t found their desired position, the rate is 22.8 percent.
This is the highest since the relevant data was first compiled in 2015.
The latest statistics showed that people between 30 and 40 have faced the biggest job losses.
BY KIM KI-HWAN [email@example.com]