Moon’s detached perceptionIt is mysterious how President Moon Jae-in could stay so persistently clueless about the economy. In the latest meeting with his senior secretaries, he cited “positive changes” in the economy despite several challenges. He pointed to improvements in job data, household income and distribution, as well as increases in unicorns — start-ups valued at over $1 billion. He made it clear that he would press ahead with existing policies.
It is true that some of the data has shown improvements. Job additions topped 300,000 for four straight months and the employment rate has been going up. But the headline figures should not be a relief. Employment for those in their 60s or older have increased. But jobs for people in their 30s and 40s have been declining. The job situation for those in their 40s is the worst since the 1997-98 financial crisis. Jobs in the manufacturing sector have been on a downturn for 20 consecutive months. The government should be embarrassed to boast about job improvements when they came entirely from part-time hires for seniors through fiscal spending.
The income data has also been misleading. Statistics Korea released data claiming that the income gap between the top and bottom groups has reached the lowest since 2011. The Finance Ministry credited it to the income-led growth policy. But the bottom 20 percent group’s income increase came mostly from state handouts, not labor. The income of higher groups has stalled because business revenue of the self-employed fell. The improvements therefore had been “inflated” and sustained through public spending, not private activities.
The presidential office lately has refrained from mentioning “income-led” growth amid negative public sentiment about it. But it has suddenly become confident from the slight showing of positive data. The government’s collective self-denial appears to be fixated on the ruling power.
Even taking into account the need to feed positive sentiment, the president’s awareness and comments on the economy are beyond comprehension. In a town hall meeting with the people last month, Moon expressed confidence in bringing about “stability in the real estate market.” But his government has suddenly announced its 18th set of real estate measures. His aides should be held accountable if they are still feeding wrong data to the president and misguiding him.
JoongAng Ilbo, Dec. 18, Page 34