[The Editors' Verdict] Job Pledges Are Nowhere to Be Seen

The presidential election is 50 days away, but there are no proper job pledges in sight. Both ruling and opposition candidates are desperately trying to win over the 2030 youth whose job opportunities are blocked, yet their pledges are surprisingly neglectful. The proposed job pledges are either regressive or insufficient. As technology and industry rapidly change, systems related to wages, employment, education, and welfare fail to keep up, worsening the job situation, but candidates lack awareness of this. Consequently, the collapse of jobs in self-employment is left unattended, while they are only eager to increase financial support to reduce COVID-19 damages. Moreover, by proposing the introduction of labor directors in public institutions and having union officials’ salaries paid with taxpayers’ money, they end up increasing ‘iron rice bowl’ jobs.

Lee Jae-myung, the Democratic Party presidential candidate’s pledges are regressive, while Yoon Seok-youl of the People Power Party is lukewarm. Lee’s job pledges seem like a ‘Season 2’ of the Moon Jae-in administration. Lee is a proponent of income-led growth and goes a step further by making basic income a core pledge, suggesting virtually unlimited fiscal spending. Like President Moon, he advocates strengthening the public sector and presents improving the quality of public jobs as the solution to job issues. However, although President Moon called himself a ‘job president’ and spoke of income-led growth, he no longer even mentions the term. It failed, as seen in the rush to increase short-term public part-time jobs to reduce the deterioration of employment indicators. Lee claims to cultivate a pro-business image and increase private sector jobs, but looking at the overall pledges, it seems just for election purposes.

Lee’s pledges to introduce carbon tax and land holding tax will only fuel the overseas outflow of jobs due to double and punitive taxation. In Korea, the tax burden on companies is heavier than in other countries, so large corporations, the top choice for employment, have increased their overseas production ratio. However, Yoon did not criticize Lee’s anti-job pledges and failed to present differentiated job pledges. He says jobs are the best welfare and promises to open an era of national happiness, which looks similar to the ‘National Happiness Jobs’ pledge from the Park Geun-hye administration. To solve job issues, a major policy innovation is necessary. Lee needs to reflect on why the Moon administration’s job policies failed, and Yoon should consider why the Park administration’s job policies were insufficient.

The transition to the digital era demands innovation in job policies. Over the past decade, the U.S. lowered its unemployment rate from 6% to 3% through reshoring policies that provide incentives to companies; Germany reduced unemployment from 10% to 3% through labor welfare reforms that cut labor costs and Fourth Industrial Revolution policies. Sweden already reformed its high-cost, low-efficiency public sector in the 1990s and increased private sector jobs, escaping from high unemployment. The same applies to the UK and Ireland. In this regard, Yoon must clarify the direction of his job policies. Companies should create jobs, schools should nurture skilled workers, and policy innovation pledges must be made to avoid repeating the failures of past administrations.

No country has succeeded by having the government create jobs. It only worsened fiscal deficits and drove unemployment rates up. In such countries, for every public job created, more than two private jobs decreased. In this respect, Yoon’s pledge to increase private sector jobs is reasonable. If Lee insists on increasing public jobs, he must abandon the idea of state monopoly over public services and reform the public sector to at least reduce side effects. As Sweden did, private companies should also provide public services such as education and healthcare, allowing citizens to choose public services and public institutions to improve productivity.

Kim Tae-gi, Professor of Economics, Dankook University