[Editorial] Poor youths

By Korea Herald

Unemployment problem shows no sign of abating

Published : Jan 12, 2018 - 17:49
Updated : Jan 12, 2018 - 17:49

The latest statistics confirm that the job market is running in the opposite direction of the hope of the Moon administration that proclaimed itself a “job-creating government.”

The number of unemployed in the country reached 1,020,800 last year, up 16,000 from the previous year. It was the worst level since 2000, and it also marked the first time that the number exceeded 1 million for two consecutive years.

The grim situation tells us that despite the warmth of modest growth -- the Korean economy is estimated to have grown 3 percent last year -- and boom in some exports like semiconductors, the good news is not spreading to the job market.

The fact that the number employed in manufacturing, which otherwise should lead to the creation of decent jobs, remained at 4.469,000, down 12,000 from 2016, attests to the bleak landscape.

As expected, young people are bearing the brunt of the harsh job market. Statistics Korea said that there were 435,000 unemployed between the ages of 15-29 last year, up 36,000 from 2016. The 9.9 percent youth jobless rate was the worst level and the fact that it steadily increased from 8 percent in 2013 shows that all the government work to address the problem has not been effective.

As a result, income for young people is growing at the slowest pace of all age groups, and their disposable income has declined for three years in a row.

The biggest reason, of course, is that economic recovery is not gaining momentum, although the government projects about 3 percent growth for the year and expects per capita gross domestic product to exceed $30,000 for the first time.

The problem is that there is no end of the tunnel in sight. Some experts point out that the situation will become worse in the coming years because “echo-boomers,” who were aged 22-29 last year, are set to massively enter the job market. In one count, about 700,000 of the age group -- which stood at 4.28 million last year -- will enter the job market in each of the five coming years.

Then think about the rapid industrial and social changes that threaten traditional jobs, including those to be displaced by new technologies like artificial intelligence and robotics.

Ironically, some recent government policy programs are backfiring on the job crunch. They include core parts of the Moon administration’s “people-centered’ economy, like the minimum wage increase, turning contingent workers into regular workers and reducing work hours.

In his New Year’s news conference, Moon made clear that his administration would continue to expand such changes. He said the increase in the minimum wage would serve as the bedrock for income-driven growth by guaranteeing the quality of life of low-wage workers and increasing household income.

He is right, but only in part. The problem is that those pro-labor policies are increasing costs for small businesses and the self-employed, who had already been struggling with slow business.

The impact will be immense, as 88 percent of the 13.6 million wage earners in the country are hired in places where the number of total workers marks fewer than 250, and there are about 6 million self-employed, including those of mom and pop stores, convenience stores and restaurants.

Some of them have already started to suffer. The number of employed in the accommodations and restaurants sectors last month dropped by 49,000 from a year prior, the largest fall in more than six years.

Moon said in the news conference that jobs are the mainstay of the economy and the foundation of individual lives. He went on to say that he would take up the employment of young people as a top priority and check on the situation in person.

Given the situation, it is imperative for the chief executive to make such a pledge. But what he needs to do first is to refrain from implementing populist policies that increase labor costs and strain the already tight job market.


More articles by this writer Back to List
Go to Desktop Version
twitter facebook youtube

The Korea Herald by Herald Corporation