09.26 Wed

Business

Administration tries to show resolve about deteriorating jobs situation

Aug 22,2018
Amid a rising panic about the jobs situation in Korea, the government is rolling out various emergency measures to show the public that it’s on the case.

In a cabinet meeting on Tuesday presided over by Prime Minister Lee Nak-yon, the government decided to raise the maximum qualifying age for tax benefits given to young Koreans from 29 to 34.

The government provides various tax breaks, including cuts in income and corporate taxes, for young people who work for small and mid-sized companies and those who run their own businesses.

“All the cabinet members, including myself, must stake our jobs on overcoming the employment crisis in Korea,” Lee said during the meeting.

In a separate meeting the same day, a special presidential commission working on a social safety net agreed that the government should give financial support in the form of monthly income to the self-employed who were forced to close their businesses and are now job hunting.

The commission is headed by Chang Ji-yeun, who is vice president of the Korea Labor Institute.

The recommendations made by the commission will be submitted to the government, which will decide whether to go through with them.

President Moon Jae-in and high-ranking government officials, including the prime minister, have been defensive since the release of a jobs report about last month that showed the worst employment figures in nearly a decade.

Data by Statistics Korea released last Friday indicated that only 5,000 new jobs were added to the Korean economy in July, plummeting from 106,000 new hires in June, which was already considered an alarmingly low number.

The data also showed that over 200,000 temporary and day-to-day jobs vanished last month.

Many believe the terrible employment figures are directly tied to a 16.4-percent minimum wage increase that went into effect at the onset of the year.

“The employment [conditions] and the livelihoods of the public are in a tragic situation,” Lee said during the cabinet meeting. “Things have not improved despite our efforts including launching a special committee dedicated to creating jobs and implementing supplementary budgets to improve employment conditions twice.”

The Moon government passed supplementary budgets worth 15 trillion won ($13.4 billion) in total - 11.2 trillion won last year and 3.8 trillion won this year - and both were specifically aimed at boosting the job market.

Kim Dong-yeon, Korea’s finance minister and deputy prime minister for the economy, said responsibility falls on him as the country’s chief economic policymaker.

“I do think that I must be held responsible for the difficult economic conditions,” said Kim on Tuesday during a meeting at the National Assembly.

This was seen as a response to President Moon’s statement on Monday that top economic officials, including Kim, must realize that “their jobs are on the line.”

Regarding reports of disharmony between him and Jang Ha-sung, the Blue House’s top policy aide, Kim said the government must maintain its economic policy centered on income-led and innovative growth as well as on fair competition.

Kim and Jang were seen to be at odds on the effectiveness of the administration’s so-called income-led growth policy on Sunday.

“It’s difficult to produce an outcome in a short period of time,” he said. “What I meant to say was that it’s vital for us to communicate and see the reaction of the market.

“Pushing up the minimum wage is ultimately where we need to go considering the structural issues found in our economy such as the [deepening] polarization [in income],” Kim added.

BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]
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