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Serious about jobs

Oct 25,2018
Who creates jobs? That question cropped up while I was reading a government plan with a long title: “Measures aimed at supporting innovative growth and job creation under current employment and economic situations.”

No doubt it is the private sector that creates jobs. They spout up when private companies enter a new business or expand their enterprises. Of course, the government and public sector can create jobs. But they are mostly quick fixes and small in size. Such short-term remedies based on people’s tax money cannot be a fundamental solution to address our ever-worsening job crisis.

The Moon Jae-in administration has decided to create 59,000 jobs in the public sector, targeting the young, middle-aged and old populations. The government said it can do that without resorting to extra spending. “We can create that many jobs by taking full advantage of the remaining budgets,” it explains. But that means those new jobs are to be short-lived — two months at best until the end of the year. The government says the measures are designed to help the low income bracket. But it really sounds like an admission that the government’s labor policy has failed.

The government’s support package also includes a 15 percent cut in fuel prices over the next six months, a 15 trillion won ($13.2 billion) subsidy for small and mid-sized companies, and another 2.3 trillion won for administrative services for private firms’ investment. Yet such measures cannot be fundamental prescriptions. The answer lies in establishing an environment for the private sector to invest. Its investment index is at the lowest level. Companies’ facilities investment, which decreased by 1.4 percent in August from the previous month, has been on a downward spiral since March — the longest streak of negative growth since 1998.

The first step to encourage corporate investment is deregulation. The government has accepted, albeit partly, the need for regulatory reforms in areas such as smart health care, a shared economy and tourism. Nevertheless, it maintains ambiguous attitudes over the issue of allowing a car-pool service in the face of vehement opposition from taxi drivers. Who would take risks and invest when a government is swayed by interest groups? A promise to deregulate is nothing unless it is backed by action.

The government must revitalize the private sector. It must stop adhering to its untested economic experiment of “income-led growth” and resorting to short-term solutions before even louder alarms start to ring. The clock is ticking.

JoongAng Ilbo, Oct. 25, Page 30