Give away my free money? I don't think so.
A government and management-led campaign to return emergency disaster relief grants — 1 million won ($810) for a family of four — is not gaining much traction, as employees resist returning the money and local governments said it would be better for them if the cash were used for consumption rather than sending it back to the central government.
The application process didn't help the situation and gave rise to misunderstanding and the mistaken return of funds. The computer-based process has a number of check boxes, one of which was for the surrendering of the grant to the government. Some people used to consenting to everything on forms just checked all.
This led to backlash by confused applicants and a rush by the credit card companies, which are implementing the program, to allow for cancellations.
In the midst of the confusion, the president and high-ranking government officials said they would be returning the money, giving their imprimatur to the round-tripping and putting company officials under pressure to do the same.
President Moon got the ball rolling on May 7. He was joined by the deputy prime minister for economic affairs, Hong Nam-ki, who donated his share on May 12. A day later, all senior officials of the Ministry of Economy and Finance and the Ministry of Employment and Labor expressed an interest in giving up the cash, unanimously.
Presidential Chief of Staff Noh Young-min, and Policy Chief Kim Sang-jo and director of National Security Office, Chung Eui-yong, joined in on Friday.
The government is encouraging donations to funnel the disaster relief into the employment insurance fund. When disaster relief funds are declined, the money goes into the employment insurance fund.
Statistics Korea on Wednesday reported 26.6 million of employed people in April, down by 476,000 from a year earlier. This marks the biggest drop since 1999 after the Asian Financial Crisis.
The government initially proposed that the 30 percent of households earning the most not get the money but relented and decided to disburse the funds to everyone, as promised in a Democratic Party campaign pledge.
High-earning executives at Samsung, SK, LG and Lotte expressed their willingness to decline the money. Business organizations including the Korea Chamber of Commerce and Industry and the Korea Employers Federation held an internal meeting, and the executives decided to donate their funds. Shinhan Financial Group, Woori Financial Group, KB Financial Group, and Hana Financial Group joined in the movement.
"There is a strong opposition towards creating a trend in which the company forces employees to donate the money paid to each individual,” an official from the financial sector said.
Others expressed similar sentiments.
“The Blue House said in an official briefing that three high-ranking officials, including the chief of staff, donated their share — if this is not giving pressure to make donations, what would it be?" an employee at a managerial level in a chaebol asked.
"Aren't donations supposed to be kept a secret?" another manager-level employee asked. "It doesn't make sense for the government to pressure companies to donate money and provide relief funds to boost the economy at the same time."
Some local governments disapprove of the government's campaign to get the money back into state coffers. They said that the intention was to boost consumption, so even the wealthy should get the money to spend.
Gangwon is encouraging consumption instead of donation to help revive the local economy. In the main square in front of the provincial government in Chuncheon on Wednesday, the Gangwon Provincial Office held a ceremony to revive the local economy using emergency disaster relief funds with local groups, such as the provincial government's labor union, the Gangwon economic association, the Gangwon merchant association and the Gangwon social welfare council.
"If we donate the relief funds, the balance will be returned to the state and local governments. I would rather spend it on our local economy," Gangwon governor, Choi Moon-soon, said. "To all public servants and citizens, please apply for disaster support funds and consume them for the local economy, as the purpose of the relief fund is to secure the livelihoods of the people and boost local consumption,” Governor Choi added.
In order encourage the use of the funds, Gangwon will produce and distribute guides on where to use emergency disaster relief funds, including traditional markets and small restaurants, cafes and clothing stores.
Gangwon is holding a relay event that promotes spending emergency disaster relief funds by posting photos on social networking services of people using their disaster relief funds at local traditional markets.
Yeongdong County, North Chungcheong, is also holding a campaign to boost the local economy. "Apply for relief funds in the form of the local gift card to save the local businesses in Yeongdong County," it is advising.
If one applies for the relief funds through credit or debit cards, it can be used throughout North Chungcheong; however, if one applies for a local gift card, the money can only be used within Yeongdong County.
The "consumption over donation" campaign is gaining steam in Seoul. Yangcheon District is emphasizing consumption over donation to revitalize local commercial districts using the emergency disaster relief funds. District Mayor Kim Soo-young practiced "good consumption" by making 1.2 million won of prepayments at local stores and traditional markets, which is twice the relief fund that she received.
Eunpyeong District launched a campaign for district office employees to encourage spending their disaster support funds. One employee visits three to four local stores in the region to promote consumption and posts photos of the visits on online.
"It is a myopic approach by the government to donate disaster relief funds because of the concern about a shortage of employment insurance funds," Kim Dong-won, a former visiting professor of economics at Korea University, said. "In times of crisis, the government should implement consistent policies to boost the economy.”
BY KIM YEON-AH, PARK JIN-HO, KANG KI-HUN, IM SOUNG-BIN [email@example.com]
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