For want of data

Kim Ki-chan
The author is a reporter on labor and employment at the JoongAng Ilbo.

On April 9, Employment and Labor Minister Lee Jae-gap held a conference with labor-related experts. He sought their advice on ways to reduce the shock on the labor market from the outbreak of the coronavirus (Covid-19) and encourage a job recovery. No ministry had turned to outside expert groups on the economic fallout of the Covid-19. The Labor Ministry’s preemptive action deserves a positive reaction from outside.

Still, the administrative moves have been slow and outdated. The ministry has ordered local offices to carry out a two-page survey on companies. Human resources officers were confounded upon receiving the homework. “This is a battlefield. People are dying [laid off] under bombs and are forced to find shelter [go on furloughs]. But the government is casually carrying out a census survey and asking how much each family earns. We are told we could be fined if we do not comply with the survey. Is any of this helpful in protecting jobs?” complained a public relations officer at a company in Seoul.

The ministry asked each company to report its payroll status by type, gender and rank, as well as employee salary levels by a certain date. Any company late in reporting or falsifying the information can be fined 3 million won ($2,500). Employers complain that they can hardly count payroll as the number of employees changes each day.

The government has been controlling data that should be more transparent during crisis times. At the moment, around 8,000 workers apply for jobless benefits a day. Under such circumstances, the government must track data on which industry or area is most hurt by the virus fallout on a daily or at least weekly basis in order to provide timely rescue funds for companies facing a liquidity crisis.

Yet the government sticks to its regular monthly compiling on the grounds that it doles out unemployment benefits on a monthly basis. It has not made any change even though our employment situation is now the worst since the 1997-98 foreign exchange crisis.

The Labor Ministry follows data daily, albeit unofficially, according to findings by JoongAng Ilbo. But the ministry keeps the data confidential. Its daily statement to the press does not include the tally on applications for unemployment benefits. Instead, it only specifies the number of local companies applying for state subsidy for paid furloughs to sustain employment and leaves out the number of workers on leave.
Actions cannot be fast and effective if the government hides negative numbers. It cannot seek the right solution recommendations from experts if it is not clearly knowledgeable on the job situation. It is only feigning to seek opinions.

“At times like this, analysis, support and policymaking should be speedy and interconnected,” said Sung Tae-yoon, a professor of economics at Yonsei University. He emphasized the speed in production and disclosure of information. Unemployment allowances also require speed. Prof. Sung recommended weekly disclosure and payouts as is being done in the United States to help workers who have lost their job during crisis times.

Lee Woo-young, an engineering professor at KoreaTech, stressed that companies are in dire situations. Adding an extra administrative burden on them when they need urgent support cannot be helpful, he said.

Other governments have been fast in disclosing and sharing information for relief action. They have been trotting out financial, tax and policy aids. Job data are fed nearly live, disclosed and analyzed. Even labor laws have been suspended to save all possible jobs. International organizations are joining forces to share effective measures.

The Organisation for Economic Cooperation and Development (OECD) held a video conference with 55 governments to share policy responses for small- and medium-sized enterprises (SMEs). Its survey on SMEs in member countries found more than half of them fighting to survive. In Korea, 42.1 percent were in critical condition and may not to last three months. The OECD has compiled tax and policy actions — including the rescue measures for the tourism industry most hard hit by the pandemic — to distribute the findings to member countries.

The OECD regards corporate creation and extinction as “creative destruction” for net job growth. It values the natural cycle and advises against excess state interference. But it considered the current situation an exception because the job losses have been caused by a pandemic — not by market factors. Lockouts have wrecked supply chains. If the global supply chain remains dysfunctional for long, the global economy could face a serious depression. Korea cannot stay immune.

In Monday’s address to the National Assembly, Prime Minister Chung Sye-kyun vowed to carry out aggressive policies which have never been attempted in this country. To execute radical and reliable policies, data must be transparent and fast. Administrative support also must be fast-tracked so that relief actions become prompt and useful.

JoongAng Ilbo, April 21, Page 27