Employment disasterDespite the Moon Jae-in administration’s promise to be a “job-creating government,” Koreans are suffering a “job shock.” According to Statistics Korea, the number of people employed decreased by 982,000 in January compared to the same period the previous year. That is the steepest drop since December 1998, when the Korean economy was in the throes of the Asian economic crisis.
The Moon administration attributes the bad job conditions to hostile environments at home and abroad from the pandemic. But that’s only half the story. Our job conditions were worsening even before the outbreak of the coronavirus due to the government’s push for drastic hikes in the minimum wage and its introduction of a 52-hour workweek for all industries and companies. Whenever side effects surfaced, the Blue House tried reassuring the public with blind optimism. What the government really did was increasing part-time and short-term jobs for the elderly after spending more than 100 trillion won ($90.5 billion) to create jobs over the last four years.
But the liberal administration did not change its policy direction. Instead of trying to fix a slew of anti-market policies to effectively respond to a strong external shock, it steadfastly adhered to existing policy, which ended up costing a number of jobs for people in their 40s and 20s. On top of that, the government indiscriminately enforced shutdowns or restrictions on operating hours for mom-and-pop stores in a crusade to fight the virus last year without offering substantial compensation.
What Hong Nam-ki, deputy prime minister for economic affairs and finance minister, said Wednesday makes us doubt that he recognizes the graveness of the situation. He announced a plan to create more than 900,000 jobs in the first quarter with local governments. That’s nothing but a repeat of existing policies based on numerical increases in part-time and low-quality jobs.
The government’s fiscal deficit last year was expected to exceed the threshold of 100 trillion won after doling out hefty disaster relief funds in an uphill battle against the virus despite shrinking tax revenues from a drastic reduction in corporate tax collections. A rush to create short-term and part-time jobs cannot do anything to sustain quality jobs. It must thoroughly review its employment policy and deregulate the corporate sector to create decent jobs for the jobless.