The wrong direction for people’s livelihoods

Lee Sang-ryeol
The author is a senior editorial writer of the JoongAng Ilbo.

“People indeed don’t change easily” could have been the response by many who watched President Yoon Suk Yeol speak on Wednesday for 12 minutes in a cabinet meeting in his first address to the public following the landslide defeat of the governing People Power Party (PPP) in the April 10 parliamentary elections. He did not admit or apologize over his contribution to the crushing defeat through his unilateral governance style, bigotry and being incommunicative. “Public well-being is the top priority in governance,” he said. He regretted that the changes he brought about had not been sufficient for people to recognize despite having set the right direction in governance and done his best. Undoubtedly, promoting people’s livelihood should be the primary goal of governance. But whether the president or the government knows what really hardens the people is doubtful.

The Economist last December ranked the 35 richest economies on their performance in the inflation-fighting year of 2023 based on inflation management, GDP, jobs and the stock market. Korea was ranked No. 2 after Greece. Yoon unsurprisingly highlighted the report to congratulate the government for its hard work of navigating the growth guided by the private sector and market forces. But the finding hardly would be agreed upon by the people.

The hands-on feel of the economy often differs from what the data says. Even as U.S. President Joe Biden boasts about the “Goldilocks Economy” that runs at an ideal growth rate without sparking too much inflation, he is facing an uphill battle for a second term because Americans are not pleased about his economic management.

Jobs are crucial to public well-being. The employment rate stood relatively sound at 62.4 percent and unemployment rate at 3.0 percent in March. But the tallies behind the headline numbers tell a different story. The employment of those aged 15 to 29 declined by 131,000 from a year ago. About 9 percent of the youth, or 349,000, earn a living from low-skilled jobs, such as packaging or delivery, according to the 2023 Statistics Korea survey on the Economically Active Population. Decent jobs are clearly in deficit for the young.

Business for the self-employed is at its worst. Loans taken out by the self-employed reached 1,109 trillion won ($801.5 billion) by the end of last year, of which 27 trillion won was behind in payment for more than three months, up 50 percent from a year ago. Multi-institution borrowers, who would be denied new loans due to their outstanding credit to more than three banking institutions, amounted to 1.73 million.

As much as 45 trillion won in insurance policies were canceled, a record high. These figures better reflect the lives of the ordinary people who cannot see economic betterment based on the rebound in exports.

President Yoon Suk Yeol presides over a Cabinet meeting at the presidential office, April 16. [JOINT PRESS CORPS]

Yet, the government remains oblivious. It suddenly announced a blanket ban on stock short selling, followed by the plan to ease capital gains tax for the richest shareholders and the revocation of a financial investment income tax. The president told the Cabinet that efforts had been lacking to make the stock market more accessible to common people. He must not have read the papers, which all pointed out that the tax cuts merely benefited the superrich.

President Yoon could have been most offended by being called “incompetent” by his predecessor Moon Jae-in. But the sharp increase in fresh food prices can hardly be matched by the jump in real estate prices and the side effects of the income-led growth policy of the former government. What pains the people most is the entrenched business slump and widening wealth disparity. The spike in everyday prices in the tough business environment and the laid-back government response have fueled public angst and anger.

Worse, there is no sight of vision and strategy under Yoon’s government to snap the economy out of lethargy. It only delivers makeshift actions, such as debt write-offs for the heavily-indebted and the interest relief or subsidy on electricity bills. Restructuring and structural reform are the only solution to set the economy back on the course for growth. There is much work to be done — such as redressing the rigidity in the labor market and rationalizing the minimum wage system and electricity rate system. The Yoon administration has been all talk and no action on reform. The people are no fools. It is why few had been impressed by the president’s emphasis on public livelihood.