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A critical illusion

June 17,2019
이미지뷰
A citizen chooses sustainable jobs as their top priority in a recent street survey on what the younger generation needs the most. [JOONGANG ILBO]
이미지뷰
Kim Dong-ho
The author is an editorial writer at the JoongAng Ilbo.

Bizarre things can happen under the Moon Jae-in administration’s public policy — even a wealthy lawyer can collect a monthly subsidy for low-salaried workers. The lawyer in his late 60s has retired from a senior judiciary post and has been working in the small law firm of his acquaintance. He does not need the subsidy for living; he is only thankful that he has some place to offer legal advice to the head of the law firm now and then.

One day, the wealthy lawyer — who only receives 2 million won ($1,688) in monthly salary from the law firm — received a notice from the district office to pick up his monthly allowance from the government. Last year, the government earmarked 3 trillion won in the annual budget to subsidize small business owners for hiring. The budget is not small, given that the government has been fretting over 1 trillion won defense cost-sharing with the United States to counter the North Korean military threat to South Korea. But the 3 trillion won budget — amounting to three times the crucial defense cost — is being recklessly squandered.

The budget allows for salaried workers getting less than 2.1 million won a month to get a maximum 150,000 won per month beginning this year. The wealthy lawyer told the district office that he does not need the money. But the official from the district office pleaded him to take the money. The government has been bewildered at the slow payout ratio. As of May, just 37 percent of the fund has been spent due to a low application rate. As a result, workplaces employing fewer than 30 are being pressured to take the money whether they like it or not.
In fact, small business employers have been reluctant to apply for the subsidy as they have to enroll to the four state insurances that should be paid for by both employers and employees to become eligible for the allowance. It is how some of the tax money ended up as petty allowance for a rich law practitioner.

The farcical policy results remind us of the Four Pests Eradication Campaign in 1958 under China’s Mao Zedong. To boost harvest and productivity, Chairman Mao ordered a nationwide campaign to root out “pests” — rats, mosquitoes, flies and sparrows — accountable for transmitting pestilence and other diseases. The decree to kill sparrows as they ate lots of grains ended up a devastating crop yield due to swarming locusts and other insects that had been kept in check thanks to the birds. Because few could protest the state-led campaign, millions of people died of starvation.

The Moon administration’s radical policies — such as making a steep increase in the minimum wage, cutting our workweek to 52 hours universally, phasing out of nuclear reactors, and demolishing weirs across the four major rivers — could all be likened to the ill-conceived decision, like killing sparrows for drawing undesired results. After the minimum wage soared last January, the job front has been shaken. The consequence was foreseeable since the government interfered in setting wage levels instead of leaving it to the market. But government policy has stayed intact as few could tell the president to stop.

The Blue House and government have been raising hoopla over the increases in the number of employed and employment rate in May. But the data tells a different story. The increase was largely owed to 354,000 new jobs for the group aged 60 or older thanks to tax-sponsored temporary jobs. As many as 250,000 jobs were lost for the main working population in their 30s and 40s. The government’s anti-market policy has dampened corporate investment and hiring.

The government’s policy to phase out of nuclear power plants has wrecked the reactor industry that succeeded for more than 60 years. Engineers are leaving companies en masse and nuclear engineering departments at universities are struggling due to a lack of enrollment. The state utility company is muddled in astronomical losses as it has to use expensive gas to power generators. Electricity bills are bound to shoot up. The demolition of weirs could also stoke dangerous floods and drought.

The Great Sparrow Campaign was a policy disaster. Policy experiments that can jeopardize the lives of ordinary people must cease. Life is too tough for the vulnerable people to be testing out policy experiments. The faster the government dumps its ill-conceived polices, the greater chance the Korean economy has to be saved.

JoongAng Sunday, June 15-16, Page 30