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A looming fiscal disaster

July 21,2017
President Moon Jae-in vowed to hire 174,000 additional public officials over the next five years starting with 12,000 this year. The plan was part of the new administration’s 100-point agenda. By creating 810,000 jobs in the public sector as well by moving those in contract-based job positions to the permanent payroll, the government hopes to help ease youth unemployment and upgrade civil services.

But the plan raises serious questions about the plan’s efficacy and affordability, since it is not based on a need for more government employees. According to a study by the Korea Taxpayers’ Association, a government employee on average is paid 107.99 million won ($96,111) a year. The payroll grows to approximately 3 billion won given that a public employee on average works for 28 years. The number is sharply higher than the 1.73 billion won estimated by the National Assembly Budget Office to afford a single additional public employee.

The group advocating for the rights of taxpayers claimed that the annual payroll for government employees already reaches 120 trillion won, taking up 7.3 percent of the gross domestic product. It argued that the state cannot provide for the families of 1.2 million government employees.

The government must not push ahead with the controversial agenda. It should first examine how many extra staff is needed in central and local governments. It then must scrutinize the quota and work that each position and division has, in order to eliminate excess.

For instance, the post office, firefighting, and social welfare segments of the government are understaffed while other area are overstaffed. The public-service sector requires as competitive environment just like the corporate sector.

If the hiring of public employees is stretched, the public finance will be ruined and too many young people will spend their days studying for the state exam.

The state exam to hire 10,000 of the lowest ninth-grade civilian servants in local governments drew 220,000 test-takers last month. Four out of 10 job-seekers already are studying for the state exam. The race for public-sector jobs should not end up distorting the private-sector job market.

JoongAng Ilbo, July 20, Page 26