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Who’s fixing the public sector?

June 20,2019
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Hong Seung-il
The author is the CEO of the JoongAng Ilbo Design.

Gongshin in Korean refers to stalwarts who contribute to winning governing power. To younger Koreans, the word is better known to mean “study gods” because it has two different meanings, though pronounced the same. The study elites are born to wealthy families in southern Seoul and groomed by the best schools and tutors. They get into the top universities and upon graduation easily find jobs in public enterprises promising generous pay and job security until the full statutory retirement age of 60. Life for Koreans has always hinged on grades and scores.

The increasingly elitist aspect of public entities became more conspicuous under the Moon Jae-in administration, which is trying to carry out a promise to create 810,000 jobs in the public sector since taking office in May 2017.

Public companies and umbrella organizations have bumped up quotas for new recruits — with some doubling or tripling their previous annual average. Contribution to job increases became a major factor in evaluating the annual performance of the heads of public companies and entities.

The increased openings at state lenders that pay more than 100 billion won ($85,000) a year on average has drawn a flood of “study gods,” or elites. They not only drew top university graduates but also certified public accountants in their 30s who already have jobs.

Another financial corporation in charge of overseeing securities and futures markets has received applications from a number of employees working for big companies who were happy to start as new recruits. Big state-owned financial names hold entry exams on the same day to prevent higher scorers from passing tests at multiple institutions. They are seen as the dream workplace. One state utility firm cannot find business divisions to accommodate the surge in new hires. The same goes for most public entities.

I hear a lot of complaints and worries from experts in many fields. They are worried that smart young people who should be experimenting and unleashing their passions and creativity in the private sector or in their own enterprises are seeking to secure public jobs that hardly require any individuality and boldness. The liberal government, with its banner cry of “inclusive nation,” cannot be proud of the fact that young brains from wealthy families dominate high-paying jobs in the public sector. The state exams for government posts that used to be popular for studious people from the working class now have a competition ratio of 100 to one because of the promise to increase government hires.

The Moon Jae-in administration has been entirely engrossed with chaebol and prosecution reforms over the last two years. But we have heard little about the much-needed reforms in the public and labor sectors. Inefficiency and unproductiveness in the oversized public sector have been a longstanding issue. Public-sector reforms have always been a challenge to any country in any age. They are highly unpopular, and the results are not always good. Every president over the last nine years has attempted reform in the public sector, but the reform of the public sector has no room in the current government, which is bent on creating new jobs to aid employment figures.

Because the Fair Trade Commission often excludes public corporations from the ranking of business groups for regulation, we are unaware of their weight in our economy. But Korea Electric Power, Korea Land & Housing, Korea Expressway and Korea Gas are all ranked in the top 20. There is still a number of quasi-state entities, like Posco and KT, which remain under government influence even though they were privatized a long time ago.

The government can hardly be expected to overhaul the public sector despite its reckless management, because public corporations are responsible for keeping up employment numbers. But rationalization of the public sector cannot be delayed in order to save the economy before it falls deeper into recession.

JoongAng Ilbo, June 19, Page 27