We need stats stat

Yi Jung-jae
The author is a columnist of the JoongAng Ilbo.

The most important thing for Statistics Korea to do is a comprehensive study on the impact of two consecutive years of double-digit minimum wage hikes. The minimum wage sits at the heart of Korea’s economic issues. One side points to the increases’ rapid speed. When taking overtime paid for non-work days into consideration, the minimum wage in Korea has shot up 54.9 percent from 2017. The hourly pay of 10,020 won ($8.95) already hovers 60 percent above Korea’s median wage level, a ratio among the highest in the world. The spike in the minimum wage has hardened the lives of self-employed, the jobless and the elderly, and has increased the non-irregular workforce. Income disparities are at their highest since data has been compiled. The minimum wage policy under the liberal administration has caused havoc.

The government and ruling party shot down that theory — they are sure a turnaround is coming. The devastating figures, they claim, are inevitable growing pains and statistics become their scapegoat. Democratic Party Rep. Park Kwang-on pointed to a fallacy in interpreting the household income data released last week. The stretch in the income of the top and bottom quintile and the plunge in the lowest-income bracket stemmed from modifications in compiling the samples from last year, he claimed. The administration replaced the uncompromising chief of the statistics office, but they still find faults with the data.

Why does the statistics office remain quiet? Job shortages are behind the worsening in distribution and employment. The monthly job data reflects the damages from the minimum wage. Yet Statistics Korea refuses to make the connection. Job additions stopped at 19,000 in January. Without temporary hires, the number of employed would have contracted in January.

More than half of the additions — 54,380 — work in family business and do not receive regular pay. Of them, 38,120 were women aged over 60. The number of people in farming and fisheries has been declining since the financial crisis. After the 16.9-percent hike in the minimum wage last year, 62,000 were added. Economists call this a typical sign of unemployment increase. The statistics office gives a lame presumption about people turning to a rural life, while adding that they cannot pinpoint the exact reason.

Kang Shin-wook, commissioner of the Statistics Korea, reviews papers at a policy coordination meeting among government agencies in the Central Government Complex in Sejong on Jan. 31. [YONHAP]

The statistics office is neglecting its job. It should investigate these atypical features. The office asks 35,000 random households to compile monthly job data. The questionnaire asked when they had started work and what they did before their current job. If they probed deeper and analyzed the data, they could have found out how many had lost jobs last year. They would also know more about how many lost work after the minimum wage went up. The answers to these questions are mostly empty. We cannot know whether they were intentionally left out or if they were not phrased properly. The statistics office repeats that it does not know the real reason. It is why economists suspect it is intentionality hiding the negative impact from the minimum wage policy.

The current commissioner, Kang Shin-wook, replaced Hang Soo-kyeong after just 13 months in office. Kang was a scholar who gave different analyses on household income data and impressed the Blue House. He vowed to deliver good statistics to back policy. He said the sampling method might have to change. He now claims there was a limit on studying the ramifications from the minimum wage through the current survey methodology. If methodology is a problem, the statistics office should develop a new system to improve it: that is what the office is paid to do.

The minimum wage is expected increase again next year. The toll on employment and distribution will also continue. There is no stop to the vicious cycle, unless the statistics office speaks out.

JoongAng Ilbo, Feb. 28, Page 30