Tag: economy

The Moon administration’s response to their poor economic policies appears to be to just spend more money:

President Moon Jae-in ordered the government on Thursday to spend more aggressively to solve problems such as slowing growth, weak jobs and worsening demographic changes.

“There are many areas in which we are still inadequate where people could feel improvements in the overall quality of their lives,” Moon said during a government national fiscal strategy meeting in Sejong. “There’s a need for the [government] finances to take a bolder role, more than ever, in urgently solving our society’s structural problems from low growth, polarization [of the top and bottom tiers], jobs, low fertility rate and aging population.” 

Although this is the third meeting held under the current administration, it was the first time that the meeting was held in Sejong instead of at the Blue House. 

“We’re at a turning point where we have to look back on our achievements in the last two years and prepare for the remaining three years,” Moon said. 

Moon particularly stressed that low-income people outside of the employment market, such as those who run small businesses like restaurants and convenience stores, need help.

“Self-employed people and those in lower-income households are struggling the most and this hurts me,” Moon said. “There is a demand for a more aggressive fiscal role in expanding jobs, enhancement on job safety nets such as introducing a system where additional financial support is provided for those whose unemployment paychecks has ended and measures for self-employed businesses.”

Joong Ang Ilbo

You can read more at the link, but the whole reason small businesses are struggling and unemployment is up is because of the steep minimum wage increase that has raised labor costs and caused major job layoffs.

Due to the slow economy more Koreans are turning towards learning trade skills than trying to pursue white collar jobs:

A growing number of people of all ages are learning blue-collar skills like building maintenance and landscaping, even if they have degrees from top universities or have previously worked for big conglomerates. 
The reason is that they feel that blue-collar jobs offer more job security than office work in a recession. 
At the city-run Seoul Institute of Technology and Education, the most popular class just five years ago was cooking, favored by people who wanted to open their own restaurants. But now it is landscaping and grounds-keeping, perhaps because there seems to be a growing appetite from condos and municipalities for clean, well-designed open spaces. 
Building and electrical maintenance are also in high demand. Courses are free and last from six months to a year . 
Choi Sung-cheol, an instructor at the institute, said, “In tough economic times the popular classes are not entrepreneurship but skills that guarantee work past the average retirement age.”

Chosun Ilbo

You can read more at the link, but I think it is good that more people are learning trades. Going to college and working a white collar job is not for everyone and many trades do offer a good income.

The New York Times has taken notice of how progressive policies that have been championed in the US have not worked in South Korea:

INCHEON, South Korea — As President Trump leads a drive to slash taxes and pare back regulation, one major economy is taking a different approach. 
Under President Moon Jae-in, South Korea has raised taxes and the minimum wage in the name of economic growth. So far, it hasn’t worked out as planned.
Growth has slowed, unemployment has risen and small-business owners like Moon Seung are complaining. Mr. Moon, founder of an auto parts maker called Dasung in Incheon, an industrial town near Seoul, says his labor costs were up an extra 3 percent last year after the minimum wage rose to 7,530 Korean won, or about $6.70, an hour. That may not sound like much, but it ate into his razor-thin profit margin and prompted him to stop hiring.

“We can’t take it,” Mr. Moon said. “This is a problem not just for the employers, but for the employees.”

NY Times

You can read the rest at the link.

This was never going to go well and it seems President Moon has finally realized this:

Anchor: President Moon Jae-in has acknowledged problems of his key economic policies, calling for ways to break the shock of minimum wage hikes and reduced work hours. This comes as the government forecasts the economy will be sluggish next year as well.
Kim In-kyung has the details.

Report: The government has decided to revise the minimum wage decision-making system by February and implement it from 2020, adjusting its pace of increase. It will also spend a record-high 61 percent of its budget in the first half of the year in 2019. 

KBS World Radio

You can read more at the link.

This news is about as surprising as North Korea maintaining missile bases:

Small and mid-sized companies are laying off workers ahead of another 10.9-percent hike in the minimum wage in January to stay afloat.

According to the Korea Employment Information Service, a total of 497,314 workers were laid off by small and mid-sized companies and applied for unemployment support in the third quarter of this year, up a whopping 37,710 compared to the same period of 2017.

This was the biggest rate of increase for the third quarter since the government started tallying statistics in 2010. Over the same period, 110,000 workers were laid off by big businesses, up 14 percent. That means the government has handed out W5.5 trillion in unemployment support in the first 10 months of this year, already surpassing last year’s total of W5.02 trillion (US$1=W1,130).  [Chosun Ilbo]

You can read more at the link.

Today's example of oxymoron: A North Korean economist https://t.co/ae0GgbtHoz

— NK Cantab (@nefornkhr) October 30, 2018

Song Young-gil, Moon's party, said after #NorthKorea dev'd #nuclear weapons, its econ improved. He couldn't tell apart streets of Pyongyang from Hong Kong/Singapore. He said #KimJongUn wants a country with no shame, one that is world's happiest–a Confucius socialism, familism.

— Tara O (@DrTaraO) October 15, 2018

It looks like the Moon administration better hurry up and fire everyone else at Statistics Korea because the job numbers just continue to be dismal:

Anchor: New jobs figures released Wednesday show a bleak situation. Unemployment reached its highest point last month since the Asian financial crisis nearly 20 years ago.
Our Park Jong-hong has this report.

Report: The latest figures show South Korea’s jobless rate rose slightly in August to four percent due to a fall in employment in the retail and manufacturing sectors.

Young adults aged 15 to 29 who were out of a job last month stood at ten percent, up six-tenths of a percentage point from the previous year and the highest since 1999.

The number of employed went up by a mere three-thousand compared to August last year to 26-point-nine million.

This increase in jobs last month is the smallest since January 2010, when ten-thousand jobs were cut.

For the second month in a row, the number of newly added jobs has stayed below ten-thousand per month.

An official at Statistics Korea, which compiled the report, said one main reason behind the dismal figures is the struggling business at automakers and shipbuilders which is spilling over to related sectors like retail.  [KBS World Radio]

You can read more at the link.

President Moon appears to be doubling down on his policies:

President Moon Jae-in called Saturday for an unswerving reform drive despite a falling approval rating and controversies over his economic policy.

He was speaking at an unprecedented gathering of all ruling party lawmakers, Cabinet members and presidential officials.

It came two days after Moon’s first Cabinet shake-up to replace five ministers, including the defense chief and the top education policymaker.

Late last month, the Democratic Party of Korea picked Rep. Lee Hae-chan, a seven-term lawmaker, as its new leader.

“The task of the times that we have to achieve together is clear,” Moon said at the meeting held at his office Cheong Wa Dae.

It’s to create a fair and just country through strong and constant reform measures, widely dubbed the “liquidation of past malpractices.”  [Yonhap]

I wonder which malpractices is he referring to?  Is the founding of the Republic of Korea one of the malpractices?  It may be considering how President Moon has denied that the ROK was not founded in 1948.

He pointed out that South Korea is at a time of a “grand shift.”

He stressed the need for addressing the gap between the haves and have-nots via an appropriate distribution policy and promoting the co-prosperity between South and North Korea on the basis of denuclearization and a peace regime.

What is an appropriate distribution policy?  The only distribution I have been hearing about is the ROK money expected to be redistributed to Kim Jong-un.  Also notice the term “peace regime” being used by Moon.  That is the preferred term now by ROK leftists to disguise their real intention of forming a confederation with North Korea.

To that end, the president said, Cheong Wa Dae, the ruling party and the government should make concerted efforts.

Moon, in particular, cited negative side effects from South Korea’s growth-oriented approach in the past, such as widening income disparity and misconducts by some vested powers.

Inter-Korean relations were once broken and the cloud of war was cast over Korea, he said.   [Yonhap]

President Moon does not like South Korea’s growth oriented economy that has brought remarkable affluence to South Korea in an incredibly short time? Also by vested powers is President Moon referring to the United States?

You can read more at the link.

After firing the head of Statistics Korea who also happened to be a female, President Moon has replaced the female Labor Minister as well:

South Korean President Moon Jae-in’s relatively new administration is becoming synonymous with high turnover, as more women appointees are either being replaced or resigning after a year of service.

Seoul’s Labor Minister Kim Young-joo, one of the few women in government to occupy a high position, publicly disclosed her decision to “resign” on her Facebook page, the Korea Times reported Friday.

Kim has weathered several controversies as the Moon administration introduced a 52-hour workweek and raised the minimum wage. The latter policy drew the ire of small to medium-sized South Korean businesses.  (………..)

Kim’s statement appears to be referring to the Moon administration’s decision to replace her with a newly appointed labor minister, Lee Jae-gap, who heads the Korea Workers’ Compensation and Welfare Service, according to the Korea Times.  [UPI]

You can read more at the link, but how much the economic numbers change will be interesting to see.  Expect the now largely state controlled South Korean media to parrot whatever the new economic numbers are in the future.