Listen to the warningDuring the National Assembly’s session Monday on the Moon Jae-in administration’s economic management, the opposition parties blamed the government for the poor state of the economy, while the ruling party blindly defended existing policies and even called for more expansionary measures to prop up the economy.
Most economic experts agree that the government’s relentless pursuit of the so-called “income-led growth” policy has failed. Ever-worsening data underscores its damages. The government claims that employment has increased, but cannot deny that income inequality has widened.
The improvement in job data is an illusion. According to Liberty Korea Party Rep. Kim Kwang-lim, the number of full-timers who work at least 36 hours a week has decreased by 1.18 million over the last two years. Job increases mostly went to those in their 60s or older through government-sponsored hiring, while jobs for people in their 30s and 40s sharply declined. The reckless hikes in the minimum wage and a dramatic reduction in work hours have wiped out jobs for the unskilled and mostly poor, resulting in a huge income gap.
The Korean economy has lost its vitality. Six out of 10 indicators for services output, including retail sales, business sentiment and others, showed a negative performance of the economy. Six fell, while four were stagnant. Production, consumption and investment temporarily picked up in August, but mostly due to the Chuseok harvest holidays. Corporate earnings last year were the worst since 2005. The economy is so weak that many even fear the possibility of deflation amid a protracted depression in domestic demand.
No matter how many times President Moon repeats that the economy is heading in the right direction, it is going exactly the opposite. The opposition say that the economy is in jeopardy because of the experiments by progressive policies.
Prime Minister Lee Nak-yon defended the government policy, saying jobs for seniors are necessary in an aging society. He blamed external factors for our economic woes. Although policy should not be entirely blamed, the government must come up with supplementary actions to bolster corporate sentiment and business investment.
JoongAng Ilbo, Oct. 1, Page 30