The slaying season has returned
The author is the head of the industry team of the JoongAng Ilbo.
In the year’s end, workers in their 40s and 50s are getting laid off. Companies that have grim prospects for next year — especially large corporations — have begun to cut down their workforce. Staff reduction hit various industries such as automobile, steel, display and aviation. Korean Air is accepting voluntary retirement after six years, and CJ, GS, Renault-Samsung and SsangYong Motor, Doosan Heavy Industries, GS, Hyundai Heavy Industry and Posco drastically reduced the number of executives higher than the level of managing directors.
The government’s employment numbers show that jobs are increasing, but why are companies — especially large corporations — laying people off? The Korea Development Institute expects 2 percent growth this year and 2.3 percent for next year. Statistics Korea claims that 300,000 more people were employed in November, and the employment rate is the highest in 23 years. But companies and workers aren’t feeling it. Companies claim that 2 percent growth is the government’s wish. They think 1 percent growth is more real. Even if the economy grew by 2 percent, it would be the lowest since 2009.
They have an even grimmer prospect for next year. The Korean Employers Federation surveyed 206 companies, and 40 percent said they will reduce investments next year. Less than 20 percent said they will invest more. For next year’s management plan, 47 percent responded retrenchment and 34 percent said status quo. Only 22 percent plan to expand. Most of them want to prepare for low growth by reducing investment and restructuring the workforce. They are worried that Korea could enter a prolonged slump like Japan’s last two decades.
Companies that are struggling more than large corporations have started to reduce their workforce in the second half. In October, 80,000 jobs in manufacturing and 50,000 in finance disappeared. Manufacturing jobs have been decreasing for 20 consecutive months. So I find it absurd that the government announced 300,000 to 400,000 more jobs for three months in a row. The numbers the government is referring to are part-time positions working less than 17 hours or temporary jobs for people over age 60. They are far from what people would consider quality jobs.
The government has had a belated reality check and is preparing an employment policy for people in their 40s. President Moon Jae-in said that it is painful to see sluggish employment of those in their 40s. However, unless the government changes ill-conceived policies such as income-led growth, rapid hikes in the minimum wage increase, converting contract workers to permanent payrolls and a universal application of the 52-hour workweek, creating quality jobs is a distant goal. I don’t want to see the recurrence of pouring tax money to create part-time jobs with less than 17 hours of work a week — and temporary positions — for the people in their 40s and 50s.
JoongAng Ilbo, Dec. 19, Page 32