[Opinion] The Population Decline Issue Should Be Addressed as a Population Decline Phenomenon

Job Creation and Housing Price Decline Needed for Resolution
Supplementary Measures Like Childbirth Subsidies Alone Are Insufficient

Imun Seolleongtang, the oldest restaurant in South Korea, opened its doors in 1904 and has been in business for an impressive 120 years. Known as a long-established restaurant and a culinary hotspot, it has also faced challenges. CEO Jeon Seong-geun mentioned that there was a major crisis in the 1970s. The mixed grain diet promotion campaign caused the restaurant to suffer. At that time, the government urged citizens to eat other grains like wheat and barley due to rice shortages. Because of this policy, on Wednesdays and Saturdays during lunch, the restaurant sold seolleongtang with noodles instead of a bowl of rice. Customers shunned the rice-less seolleongtang. Back then, even teachers checked students' lunchboxes daily to see if they contained barley or other mixed grains. Many students complained that their lunchboxes tasted bad. Additionally, the government promoted the cultivation of Tongil rice, which had a higher yield per unit area, to increase rice production. By eating less and producing more, rice self-sufficiency was achieved in 1976.

Nowadays, there is a surplus of rice. The government stores about 400,000 tons of leftover rice that people cannot consume. Old rice is even used as animal feed. Despite the surplus, many people now consume mixed grain meals, which were once disliked. For example, these days, our household table features rice mixed with oats. It is said to be tasty and healthy. Originally, oats were used as horse feed. What humans once ate is now eaten by animals, and what animals once ate is now eaten by humans. Looking back, the mixed grain diet promotion was a good policy.

On the other hand, the spread of Tongil rice leaves some regrets. Tongil rice, which covered rice paddies nationwide in the early 1970s, is now nowhere to be found. Tongil rice lacks flavor. Since people do not eat it, it is no longer cultivated. However, there was a problem caused by Tongil rice dominating the paddies nationwide for a while. Native rice varieties were virtually wiped out. In the past, the Korean Peninsula was famous for producing delicious and diverse rice varieties. Diverse varieties and seeds are important resources. As of 2020, the global seed market for wheat, rice, and others was valued at $44.9 billion. The DRAM market, which supports Korea’s economy, was about $50 billion last year.

Looking at recent birth policies, one might think that regrets could arise in the future. Last year, the budget for addressing low birth rates was 48.2 trillion won. However, the number of newborns was only 230,000. This means that over 200 million won was spent per newborn. It is necessary to review whether the money was spent effectively. The Korea Research Institute for Human Settlements released a report stating that the most important factor in deciding to have a first child is housing purchase or rental prices (30.4%). The Bank of Korea believes that if the employment rate of Korean youth (ages 15?39) rises to the OECD average, the total fertility rate would increase by 0.119. Simply put, if housing prices fall and good jobs increase, people will have more children.

In fact, the employment issue is likely to resolve itself in a few years. Recently, the Korea Employment Information Service released a report stating that to achieve long-term economic growth projections (2.1?1.9%), an additional 894,000 workers will be needed by 2032. When there are workers but more jobs, the neighboring country Japan has already shown what happens. Japanese companies plead with university students to join their firms, a phenomenon known as Owahara (おわハラ). Housing prices are also likely to fall as the population declines. In the long run, population decline solves problems caused by population decline. It is difficult to solve these issues with symptomatic treatments like childbirth subsidies. What the government needs to do to address population decline is to boost economic growth and stabilize housing prices. Simply put, if the government does well what it is supposed to do, the population problem will also be resolved.