[4 Years of Moon Administration Economic Report Card] Short-term Workers Increased by 1.7 Million in 4 Years... Income Polarization Worsened More Than Twice

Unemployed Increase from 1.16 Million to 1.38 Million
Over 17 Million Economically Inactive Population
4050 Economic Core Unemployed Up by 100,000

Income Growth Gap Between Top and Bottom 10%
22.3 Times, 2.4 Times Higher Than Previous Government's 9.2 Times

[Sejong=Asia Economy Reporter Moon Chaeseok]

#A (31), who has been failing the police officer exam for several years, can no longer even dream of getting a job in the private sector. Aiming for a decent job in a private company, A repeatedly failed and then decided to become a public servant, but as A continued to fail the civil service exam, even jobs in small and medium-sized enterprises became more distant.

#B, a photographer with 7 years of experience, became an 'owner' last year by opening a studio. Due to the high workload of shooting and retouching, B initially planned to hire part-time staff after opening the studio but soon gave up. The overlapping impact of COVID-19 and the gradual expansion of the '52-hour workweek system' made B hesitant to hire.

Over the past four years since the Moon Jae-in administration took office, the memorable economic keywords have been income-led growth and the 52-hour workweek. The blueprint was to raise income to drive growth and reduce work burdens to create an evening life. To this end, in the first year of the Moon Jae-in government in 2017, the Minimum Wage Commission raised the minimum wage by 16.4%, followed by a 10.9% increase in 2018. The amendment to the Labor Standards Act, which reduced the statutory weekly working hours from 68 to 52, passed the National Assembly in 2018.

However, reality was different. Employers such as self-employed business owners, burdened by the sharp rise in minimum wage, reduced their staff, and the evening life was limited to some groups with stable jobs. As mentioned in the cases, A became someone who only looked toward the civil service exam, and B hesitated to hire. Over the past four years, the quality of employment has clearly deteriorated. While emphasizing regular employment, the number of permanent jobs classified by Statistics Korea increased and temporary or daily jobs decreased, but the number of unemployed and economically inactive people also increased accordingly.

According to an analysis of Statistics Korea microdata on the 7th, the number of unemployed increased from an average of 1.162 million per month in January-March 2017, just before the Moon Jae-in administration took office, to 1.38 million in the same period this year, and the economically inactive population not seeking jobs grew from 16.556 million to over 17 million. The number of involuntary unemployed, such as those who lost jobs or took honorary retirement, rose from 386,000 to 737,000. Among employed persons, short-term workers working less than 36 hours per week increased from 4.022 million to 5.711 million, nearly 1.7 million more over four years.

Employment insecurity among people in their 40s and 50s, the backbone of the economy, is also increasing. The number of unemployed in these age groups rose by about 100,000 compared to the average monthly figure in the first quarter of 2017, just before the Moon Jae-in administration took office. C, who recently took voluntary retirement from a small and medium-sized enterprise related to automation equipment, lamented the difficult employment environment, saying, "Reemployment for middle-aged and older workers is much harder and takes longer than for young people due to salary issues and other factors."

Choi Young-gi, visiting professor at Hallym University’s Department of Business Administration, pointed out, "If the government, which proclaimed itself a job government, wanted to show groundbreaking results, it should have reformed the labor market," adding, "There is no courage to change the labor market order through reform to vigorously create employment."

Income polarization is also severe. According to data posted by Shin Sedon, honorary professor at Sookmyung Women’s University, at the Korea Institute for Future Strategies titled 'Evaluating the Economic Achievements of the Moon Jae-in Government over Four Years,' income polarization expanded over the four years. Comparing the average annual income of 2016 before President Moon’s inauguration and last year, the income of the 1st decile (bottom 10%) increased by 115,000 won, while the income of the 10th decile (top 10%) rose by 2,571,000 won. The gap between the two deciles was 22.3 times, larger than the 9.2 times gap between 2012, before the previous administration, and 2016, its fourth year.

Experts point out that even considering the special situation of the COVID-19 pandemic last year, the current government’s pro-labor stance worsened employment and income distribution. Honorary Professor Shin Sedon said, "Because employment indicators are dismal, income indicators also worsen, and a vicious cycle of job losses repeats."

The government is also aware of the severity of the employment situation. On the same day, Lee Eok-won, 1st Vice Minister of Strategy and Finance, chaired the Innovation Growth Strategy Review Meeting and Policy Review Meeting at the Government Seoul Office and said, "The GDP growth rate in the first quarter recorded 1.6%, recovering to pre-crisis levels," but added, "For domestic demand recovery to keep pace with rapid export improvement, employment conditions must be supported." He continued, "Since employment is the indicator that most affects people’s livelihoods, we will make every effort to create jobs."