Moon vs. Macron
The author is a columnist of the JoongAng Ilbo.
The number of job aspirants has hit a record high. Over 1.5 million young Koreans are without decent jobs upon graduating from school, or one out of every three or four. The sighs of the young must have reached across the Atlantic. The U.S. Treasury Department in its semi-annual report to Congress on macroeconomic and foreign exchange policies of major trading partners pointed out the South Korean government should do more to provide economic opportunities for the young.
Korea was the only country among major U.S. trading partners in the review that received such a disapproving mention on jobs. The problem and solution both lie in the labor market. The iron-clad vested power of the elite union of large companies should be fixed to come to a social compromise through cooperation from employers. But the liberal Moon Jae-in administration cannot dare to vex the powerful Federation of Korean Trade Unions (FKTU).
Instead, it fixes numbers. Data indicated additions of hundreds of thousands of new jobs for the young. The government has been touting a “remarkable recovery” in youth employment. Actually, it has been mass-producing temporary jobs through record tax spending and deficit financing. Most of those jobs were for food deliveries.
Then there are real estate prices. It’s no wonder that the country’s birthrate is the world’s lowest. Korea’s fertility rate fell to half of the worldwide average. Its suicide rate is at the top, double the average rate of the members of the Organization for Economic Cooperation and Development (OECD). The two rankings have almost become fixtures.
President Moon and French President Emmanuel Macron both assumed office in May 2017. Both were elected on the slogan of rooting out past ills, or degagism (kick-them-out) in French. Both leaders also will be finishing their term about the same time. But the shape of the two countries under the two over the last four years is entirely different. France has finally shaken off its image as “Europe’s sick man.” The liberal president of the Socialist Party has battled with populism. The French economy grew faster than Germany’s. There was nothing new about Macron’s policy. He reduced the influence of umbrella trade unions and the number of government employees. He streamlined debt-ridden a public railway operator to overhaul the public sector. He fought the powerful unions by warning that he would not “yield anything to the lazy.”
Macron did not mind his sinking popularity rating. He vowed to take all the responsibility and talked directly with union groups and persuaded the parliament. He wanted to change the country to a “working nation” from a country where change had been impossible.
Moon was the opposite. He enjoyed the highest-ever approval rating for a Korean president by further cementing the unions’ power over permanent jobs for existing workers. Despite his chant of eradicating “all past evils,” jobs have become scarcer, the real estate market is in a wreck with runaway prices, and the birth rate has dropped. Even the ruling Democratic Party chairman called it a “disaster age for the young generation.” When Moon met with Macron, he claimed similarities in their policy of placing jobs as their top priority in governance.
I would rather not dispute that. But the problem is how it all ends. “All’s Well that Ends Well” is the title of a play by William Shakespeare. Israeli psychologist Daniel Kahneman developed Shakespeare’s finding into a Nobel-prize-winning Peak-end rule. He found that people judge their experience largely based on how they feel at its peak (most intense point) and its end, rather than based on the total sum or the average of every moment of an experience
Macron has embarked on another unpopular war of reforming the country’s costly pension system. He proposes an overhaul to a system where people work more and receive less in pension to create a flexible and competitive labor market. Although he faces reelection next year, he wants to press ahead with the controversial reforms to spend his final year usefully. In the meantime, Moon and his party are busy handing out money to almost every household ahead of the next presidential election on March 9.
Moon declared his remaining task is to create a new future and ordered government officials to devise special ways to create jobs for the young. Every time Moon asks for radical measures, more temporary jobs are mass-produced. His administration has so far spent nearly 100 trillion won ($86.9 billion). Since the government has already confirmed the poor results it achieved with such unconventional measures over the last four years, it must go back to the beginning.
It is hard to expect the government to push ahead with labor, pension and public-sector reforms in its final year. But it still has time to fix a 30 percent increase in employees at the education offices when the number of college students decreased by 30 percent. The burden of increased payrolls in the public sector will be transferred to the young generation in the future. All this must stop to make a better future for the young. There is still time to mend some of the wrongs.