Mun "Employment, Positive Outcomes"... Experts Say "Please Stop Government-Led Jobs"

President Moon Jae-in's 4th Anniversary Inaugural Special Address

President Moon Jae-in is delivering a special speech on the 4th anniversary of his inauguration at the Chunuchu-gwan Grand Briefing Room of the Blue House on the 10th. May 10, 2021 [Photo by Yonhap News]

[Sejong=Asia Economy Reporters Son Seon-hee and Moon Chae-seok] The Moon Jae-in administration proclaimed itself as a ‘job-creating government’ upon its launch four years ago. However, paradoxically, among the economic policies introduced so far, it is evaluated as having the weakest performance. Instead of private sector jobs, the administration poured massive public funds in the early days of the regime to create mainly short-term public jobs, which ironically had the effect of further shrinking employment.

President Moon Jae-in expressed regret over job creation in his special speech on the 4th anniversary of his inauguration on the 10th. President Moon said, "There were positive outcomes such as the strengthening of employment safety nets and social safety nets and improvements in distribution indicators," but added, "We still have not recovered to the pre-(COVID-19) crisis level." He continued, "We will focus our policy capabilities to ensure that the recent economic recovery trend leads to job recovery."

The part that drew attention when mentioning job recovery was his statement, "Above all, we will focus on creating quality private sector jobs." This marks a slight change from the previous stance of creating public sector jobs as a ‘primer’ to induce private sector job creation.

The Ministry of Economy and Finance, the main department overseeing economic policy, recently praised itself in the ‘Economic Policy Achievements and Tasks’ document distributed on the 4th anniversary of the government’s launch, stating, "(Until 2019) government policy achievements became visible in jobs, and employment and distribution conditions gradually improved." However, looking at the related indicators, the situation is quite different. The annual employment rate in 2016, before the Moon Jae-in administration took office, was 60.6%, and the unemployment rate was 3.7%. However, by 2020, four years later, the employment rate was 60.1%, and the unemployment rate was 4.0%. The employment rate fell, and the unemployment rate rose, indicating a deterioration in employment indicators.

In particular, the fact that the public sector led job creation under the Moon Jae-in administration is cited as a problem. When the Moon administration launched in 2017, it set ‘creating 810,000 public jobs’ as a national agenda, and in reality, public sector jobs increased by hundreds of thousands every year after the government took office.

Professor Geum Jae-ho of Korea University of Technology and Education pointed out, "The government said it would increase jobs, but it failed in the most important private sector job creation," adding, "Various regulations on private companies, especially the minimum wage increase, practically hindered corporate investment and employment activities." Regarding the government blaming the COVID-19 crisis as the main cause of the current employment situation’s deterioration, he said, "It is not just a COVID-19 problem," and added, "Even after this crisis passes, the effects of the Moon administration’s policy mistakes, such as the minimum wage, which is a core of income-led growth, will disappear after a few years."

Professor Kim Tae-gi of Dankook University’s Department of Economics also strongly criticized, saying, "The government repeatedly saying it did well on employment policy is insulting to the people," and "The government’s increase in only public jobs has devastated the overall job market." Professor Kim added, "We need to stop saying ‘the government creates jobs’ and instead focus on respecting companies so that they can create jobs."