[4 Years of Moon Administration Economic Report Card] Lost Both Jobs and Homes

Housing Index and Unemployment Rate Jump Over 18%

Income Inequality Worsens, Fiscal Health Rapidly Deteriorates

[Asia Economy Reporters Eunbyeol Kim, Chaeseok Moon] During the four years since the inauguration of the Moon Jae-in administration, asset prices have risen significantly while the quality of employment has deteriorated. Although the COVID-19 pandemic that struck the world last year was a special circumstance, employment and asset price growth, which had been unstable even before the pandemic began, have become even more difficult issues following the COVID-19 crisis. From the start of the administration, the policy goal was to "lift the poorest in our society" through income-led growth policies, but after four years, income inequality has actually widened.

Despite an increase in regular employment, there has been a simultaneous contraction in self-employment and a rise in unemployment. To make matters worse, real estate prices have skyrocketed. Analysts attribute this to the Moon Jae-in administration’s regulation-focused policies aimed at "protecting actual homebuyers and curbing speculation," which, combined with massive financial stimulus in response to COVID-19, led to a sharp rise in housing prices.

According to Statistics Korea on the 7th, the average monthly number of unemployed persons in the first quarter of this year (January to March) was 1.38 million. This is an increase of 218,000 (approximately 18.8%) compared to the average monthly unemployed number of 1.162 million in the first quarter of 2017, just before the Moon administration took office. Notably, unemployment among those aged 40 to 59, considered the backbone of the Korean economy, surged. During the same period, the number of unemployed persons aged 40 to 59 rose from an average of 303,000 to 401,000 per month. The unemployment rate for those aged 40 to 49 increased from 2.1% in 2017 to 2.5% last year, and for those aged 50 to 59, it jumped from 2.2% to 2.9%.

Government finances rapidly worsened. In the process of responding to COVID-19 last year, supplementary budgets were enacted, resulting in a fiscal deficit. In February, the integrated fiscal balance, calculated by subtracting total expenditures from total revenues, showed a deficit of 16.1 trillion won. This was due to an increase in contingency fund spending for COVID-19 response, which caused total expenditures in February to rise by 2.9 trillion won compared to the previous year.

Professor Se-don Shin, emeritus professor at Sookmyung Women’s University, described the Moon administration’s economic performance over the past four years as a "complete failure," stating, "The rushed introduction of policies such as the minimum wage led to a decrease in jobs and working hours, and labor income actually declined."

This is also why younger generations are increasingly investing in assets such as real estate, stocks, and even cryptocurrencies. Compared to May 2017, when the current administration began, the KB Housing Sales Price Composite Index (nationwide) rose by 18.95% by the end of April. The KOSPI index increased by 40% over the past four years.