A country never experienced
The author is an editorial writer at the JoongAng Ilbo.
The Moon Jae-in administration is out robbing the public again through plans to raise bus fares. Some 1.5 trillion won ($1.25 billion) is needed to hire more bus drivers following the introduction of the 52-hour workweek. Whether bus fares are increased or bus companies supported with the state budget, the public will ultimately be the ones to bear the extra burden. I cannot but wonder what the government has done so far — except sit on its hands until it finds the need to collect more taxes from the public.
The Moon administration is fixated on the belief that it can do anything as long as it raises tax and government spending. A good example is its decision to rapidly push minimum wage hikes. Side effects of the wage increase are popping up across the society, just as so many mainstream economists warned. Contrary to their hopes, the poor are increasingly losing their jobs and mom-and-pop store owners are going out of business. The number of unemployed has already hit 1.25 million, the highest since the 1997 financial crisis.
As the self-employed have been struggling to pay the remarkably higher minimum wage, the government has spent nearly 3 trillion won each year from state coffers to support those employers with funds. The same applies to the case of the government-enforced 52-hour cap on the workweek. As a result, ordinary citizens will have to pay higher bus fares stemming from the need for bus companies to hire more drivers to follow the new guidelines.
The worst part of it all is that people’s lives are not improving. Income polarization has worsened as earnings for those already earning little are decreasing. Despite their hardships, the government is boasting that Korea’s consumer price index (CPI) gained only 0.5 percent compared to a year ago, indicating market stability. But that is far from the reality, which shows the CPI for living necessities rising sharply. The government based its “stable consumer price index” on the calculation system that includes prices of home appliances, whose sales have noticeably decreased. In fact, in the first quarter, the price of rice rose by 18.5 percent on year, beans by 21.4 percent, chicken by 10.9 percent, squid by 21.1 percent and peaches by 22.6 percent. The prices of goods we use almost every day have all risen.
To make matters worse, the government ended its fuel tax breaks from May 7, forcing citizens to pay more to fuel their vehicles, just as Iran tensions are driving up international oil prices. Again, the public will be the ones to bear the cost. Is this the country President Moon promised to create in his inauguration speech two years ago? “I and my administration will lead the people to a country we have never experienced,” he said on May 10, 2017.
Things would have been easier if people had more money in their pockets, but the reality is the opposite. Last year, Korea’s household income grew by 4.1 percent on year, but taxes increased by 11.4 percent and the social insurance fees rose by 5.8 percent. After the government has bumped up the valuation of apartments by about 20 percent, owners will be forced to pay higher property taxes — in some cases millions more won — from this year. It all ends up with ordinary citizens tightening their belts.