Creating quality jobs is keyThe government will shell out its third relief fund to the self-employed and workers in precarious situations next month. The 5.6-trillion-won ($5.1 billion) package is much smaller than the first universal relief handout amounting to 14 trillion won. But the check per household has increased to 3 million won from 1 million won. The selective aid can be speedily distributed — and prove less wasteful. The government has finally got around to smart spending.
Everyone is hardened by the yearlong Covid-19 crisis. But the pains of the self-employed are unimaginable. Although social distancing remains at Level 2.5 — only one notch down from the top Level 3 — mom-and-pop stores across the country feel like they are under a complete lockdown. Due to the ban on gatherings of more than five, their year-end seasonal peak has been killed. According to a report by the Bank of Korea, the number of households who no longer have any savings left and cannot afford debt interest payment has more than doubled from a year ago. Even with deferment granted, households on the brink of going bankrupt will only surge.
The number of extremely poor people has been growing under the Moon Jae-in administration. The recipients living off basic state allowance are tallied at 2.72 million, 550,000 more than when the liberal administration took off. Although Covid-19 worsened the matter, poor economic management also played a part. The number of poor increased by 160,000 in 2018 and 138,000 in 2019. They have been victimized by the government’s income-led growth policy. A sharp increase in the minimum wage and a drastic cut in work hours have pained small employers and wiped out jobs of workers on contracts or a temporary basis.
The third relief fund is a form of much-needed emergency aid for the poor and weak. But financial aid cannot go on forever and cannot be a fundamental solution. To help pull those in need out of poverty, jobs are needed. But antibusiness legislation and regulations have only dampened corporate hiring. Their hiring planned for the first quarter is estimated at the lowest since the 2008-2009 global financial crisis.
Instead of trying to inflate employment data through the addition of temporary jobs for senior citizens, the government must remove outdated regulations and stimulate companies to recruit.