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Burying their heads

May 22,2018
The Blue House stubbornly adheres to a Pollyanna-ish view of our employment situation. Following its policy chief Jang Ha-sung’s remarks that the government’s push for sharp increases in the minimum wage did not cost jobs, Hong Jang-pyo, President Moon Jae-in’s chief secretary for economic affairs, underscored that no universal indicators show that employers cut hiring due to the lifting of the hourly minimum wage.

Bahn Jahng-shick, former vice minister of finance and current chief secretary for jobs in the liberal Moon administration, emphatically said that “jobs have actually been growing” despite the spike in the minimum wage. The government plans to raise the hourly wage requirement to 10,000 won ($9.20) by 2020 following a 16.4 percent increase this year. The Blue House officials’ comments reflect their strong conviction that rapid hikes in the minimum wage will not adversely affect our labor market at all.

But our jobless number for the month of March hit the highest level in 17 years. The number of people who found jobs in the retail and restaurant and lodging industries has been declining since last December — shortly before the government raised the minimum wage.

That’s not all. The number of people who got jobs in the manufacturing sector — an indicator of quality jobs — dwindled. Those who gave up looking for jobs set a new record since 2014. As a result, the number of people who were employed in the Feb.-April period contracted to less than 200,000 compared to more than 300,000 in the same period last year.

The Blue House is unshaken in its conviction that there is no problem. Chief Secretary for Jobs Bahn claimed that a decrease in the working population aged between 15 and 64 put the brakes on increasing employment. But such assessments can hardly explain the noticeable increase in the number of people who simply gave up looking for work. The government’s expectations for an uptick after June are far-fetched given our low business confidence index. We can hardly agree to the government’s definition of “an increase in the number of workers on the permanent payroll in the public sector” as “an increase in quality jobs.”

Advanced economies are enjoying high employment. Japan’s large companies are hunting for workers even before they graduate from college. For us to take a similar path, the government must end its anti-market policies, push for deregulation and reform the labor market.

JoongAng Ilbo, May 22, Page 26