Severe Asset, Income, and Educational Inequality... The Key Is Education
Universities Should Be Allowed to Choose Full Autonomy Without Government Funding
The Stronger Labor Regulations Like the 52-Hour Workweek, the Lower Worker Welfare
Trump’s Tariff War Likely to Lead to a Multipolar Global Economy
"Economic polarization is a reality, but we must not harbor hostility towards each other. Policies that can embrace one another must emerge."
Jeong Gap-young, former president of Yonsei University, emphasized in an interview with Asia Economy on the 14th that economic policy should avoid conflict. Despite the chaotic political situation following the impeachment of former President Yoon Seok-yeol, he advised that both progressives and conservatives must speak with one voice regarding growth for the future.
He particularly stressed education as a solution. He argued that nurturing talent capable of thriving in future advanced industries is essential for raising Korea's potential growth rate. To reduce social polarization, he insisted that marginalized groups must be helped to achieve upward mobility through education.
He offered hope that even amid extreme political conflicts, the economy can move in one direction. For this to happen, he said, a climate must be created where knowledge groups across society raise their voices in the right direction.
- There is severe conflict over the economy even after the impeachment. What do you think is the reason?
▲ It stems from structural problems in our economy. First, the potential growth rate has been continuously declining, falling below 2%. If the maximum growth rate achievable by utilizing all resources and technology of a country is below 2%, it is difficult. To absorb all youth employment, the potential growth rate should be at least 4-5%. Constraints on growth must be resolved to create jobs, enable youth employment, and provide new support to marginalized groups.
Second, growth is limited, and economic imbalances are quite severe. Asset imbalances such as housing prices, income disparities between large corporations and small and medium enterprises, and educational disparities between Gangnam and non-Gangnam areas or Seoul and provinces have become too large.
Third, these imbalances have polarized classes, and politics has become divided into conservatives and progressives representing these polarized classes. It is what you might call fandom politics. Politics is conducted only for their own fans and supporters.
- Still, isn't the level of conflict excessively severe?
▲ Our society is homogeneous in terms of ethnicity and language, which is very rare. Yet, within this homogeneous society, our economy is highly polarized. Conflict is inevitable. To resolve this, the political sphere keeps talking about income redistribution, but with the current growth rate limitations, there is no pie to divide. The pie remains the same, but calls to divide it keep increasing social conflict.
- Why is our economy not growing?
▲ To increase growth rates, productivity must be raised in future advanced industries and innovation industries must lead. But there is a lack of manpower. The premium of universities that nurture talent has greatly diminished and become poor. With a declining population and industries moving toward advanced sectors, highly specialized professionals must be produced, but our regulatory structure makes this impossible. Although AI graduate schools are being established, they will not be able to attract professors. Even SKY (Seoul National University, Korea University, Yonsei University) graduate schools in engineering and natural sciences are under-enrolled. Meanwhile, we still only talk about income redistribution and taxing the wealthy. While this may have short-term effects, it is not desirable in the long term. Educational reform is necessary in the long run.
- So you mean education is the solution to economic polarization?
▲ Yes. From the perspective of marginalized groups, educational inequality is more serious than economic or wealth inequality. Education causes the rich to get richer and the poor to remain poor. Poor people cannot become wealthy through income redistribution alone. To enable social mobility, education is the only way. Currently, the educational ladder is completely broken. Of course, income redistribution has short-term effects. But in the long term, an escape route must be opened in education so marginalized groups can achieve upward mobility. However, policies so far have focused on equalization rather than creating new opportunities for marginalized groups to rise. Income and asset inequality are problems, but the most important issue is the education system. That is how there will be hope for the future and no hostility between groups.
- How should education policies focused on equalization be changed?
▲ On the premise that private universities do not receive government funding, they should be allowed full autonomy over all internal policies. If there are universities that want such complete autonomy, it should be permitted so that universities can compete properly. But one condition must be attached: they must admit 15-20% of marginalized students in their freshman selection. This would open many paths for marginalized groups to receive quality education.
- Private universities receive about 20-30% of their funding from the government. Without government support, can universities operate?
▲ If universities can freely set internal policies, they could raise tuition fees at least in line with inflation or slightly higher. The government should continue to support university research and development (R&D) budgets. With autonomy, universities could do much more, such as adult education and professional degree programs. More importantly, universities could freely establish departments to actively nurture talent for advanced industries in line with changing times.
![Jeong Gap-yeong Former President "To Resolve Conflicts, Economic Growth is Necessary... The Solution is Education" [From Conflict to Harmony]](https://cphoto.asiae.co.kr/listimglink/1/2025041416430019083_1744616580.jpg)
Jung Gap-young, Chairman of the UNICEF Korea Committee, is being interviewed by Asia Economy at the UNICEF office in Mapo-gu, Seoul. Photo by Jo Yong-jun
- What serious problems do you see related to industry?
▲ The biggest demand from companies to the government is deregulation. Companies must be given complete autonomy. The semiconductor industry thrived in its early days because the government did not interfere. It grew without government intervention. In contrast, agriculture, finance, and education, where the government still interferes, are all backward now. The driving force to break through the limits of potential growth rate comes from deregulation. Especially for future-oriented industries, regulations must be fully lifted.
In Japan, TSMC completed a factory in two years. They worked in 24-hour shifts. Japan moves quickly without regulation in essential advanced industries, but in Korea, the 52-hour workweek makes that impossible.
- Our society seems to pursue work-life balance (WLB) too much and lacks the intensity of the past. The 52-hour workweek was passed with bipartisan support.
▲ If society moves in that direction, highly skilled professionals with very high added value must be supplied, and such high value-added industries must exist. Advanced countries hold many patents and have high value-added industries like pharmaceuticals, luxury goods, design, and finance. Korea lacks high value-added industries compared to advanced countries.
- Until high value-added industries reach advanced country levels, it seems we have no choice but to work hard. Chinese innovative companies reportedly work overnight without holidays. The 52-hour workweek regulation must be lifted.
▲ There is much conflict in the labor sector. When the non-regular worker protection law was introduced, I publicly opposed it, but it passed and still causes many side effects. It is not a law protecting non-regular workers but a law that forces their dismissal every two years. If workers had to be employed for life once hired, who would want to hire many people? The more labor markets are regulated, the less employment and worker welfare there are. Of course, a fully flexible labor market is difficult in reality. But with some labor flexibility, incentives for holidays or wages could create a win-win situation. If labor and management agree, work should be allowed as much as possible.
- How should we overcome the domestic demand slump?
▲ Our domestic market is very poor and small-scale. No matter how much the government tries to protect self-employed people, they keep disappearing. The government should not only protect but also restructure the self-employed sector toward progressive industries. Of course, new jobs must exist, but restructuring the saturated self-employed market is essential. Local governments have large budgets these days. The richest entities in Korea are local governments and education offices with surplus budgets due to local finance grants. Many people in their late 40s to mid-50s hike. How about local governments and education offices supporting universities to retrain and provide vocational training for them? The government should actively induce and incentivize such initiatives.
- Can politics solve economic problems even amid conflict?
▲ It is not entirely impossible, but at least two conditions are necessary. Politicians must avoid short-term populism and present a vision for the nation's future. The other is the level of voters. Voters must at least distinguish whether a policy is correct or just populism aimed at popularity.
- But looking at Trump, the US is also caught in populism.
▲ That is the problem with the US. Still, one major difference between US and Korean society is that knowledge groups are alive in the US. Harvard announced it would not accept demands to change campus policies such as eradicating anti-Semitism under the Trump administration or abolishing diversity, equity, and inclusion (DEI) programs. US judges also block unreasonable administrative orders from the Trump government. No matter how chaotic society is, famous research institutes issue statements, publish research, and criticize the government. Knowledge groups also present visions for the future.
But we have no think tanks. There are many state-led research institutes with large budgets but little social presence. Private company think tanks cannot speak out publicly. Professors have no time to voice opinions. In the past, university presidents gave social messages at entrance or graduation ceremonies, which newspapers covered, but now no one knows who the university president is or what they do. Now, policy evaluation seems to be only by ruling and opposition party spokespeople. In any country, politicians change, but there must be a major flow regarding the national economy. The government needs voices to guide it properly, but it is regrettable.
- Many professors have become "poly-professors," aligning with conservative or progressive parties according to their tendencies, representing those sides. They do not seem to speak or act objectively for the nation's and society's future.
▲ There are many such cases. For a country to develop, rationality and scientificity must be respected. That is the role of knowledge groups, but since that role has disappeared, no one provides signaling to lead the future. For example, in the US, despite political controversies, there are research institutes like Heritage and Brookings that announce what politics should do and present their vision for the future. These places are not purely academics; good experts move between politics and universities and interact.
- Then what should we do?
▲ In our structure, companies and industries must take the lead. This applies to foreign trade and relations with the US as well. The Korea Economic Association, Korea Chamber of Commerce and Industry, and Korea Employers Federation should not only hold events or lobby for companies but also play roles for the nation and society as a whole. In the US, business leaders like Jamie Dimon, CEO of JP Morgan, openly criticize Trump’s policies. Korean business leaders should also play roles linked with collective intelligence. There is no independent think tank created and supported continuously by the business community.
- They should research and voice the path our society should take, not just reflect corporate interests.
▲ Exactly. In the past, the Federation of Korean Industries invited social figures to conduct economic education for middle and high schools. If no one steps up, there will be no change.
![Jeong Gap-yeong Former President "To Resolve Conflicts, Economic Growth is Necessary... The Solution is Education" [From Conflict to Harmony]](https://cphoto.asiae.co.kr/listimglink/1/2025041416443219097_1744616672.jpg)
Jung Gap-young, Chairman of the UNICEF Korea Committee, is being interviewed by Asia Economy at the UNICEF office in Mapo-gu, Seoul. Photo by Jo Yong-jun
- Trump has imposed tariffs even on allied countries. Will this continue?
▲ It is difficult for Trump’s policies to continue 100%, but at least 20-30% may remain. Protectionist tendencies may dominate the world more than before. On the other hand, Korea also faces risks, but the international order seems to be moving toward self-help. If relations with the US deteriorate, there could be security threats. North Korea getting closer to Russia is also not good. Historically, Russia has been more aggressive than China. The Ukraine invasion and the Korean War were approved and supported by the former Soviet Union.
- China’s manufacturing competitiveness has developed to an astonishing level. There was talk of "Peak China" at one point. How do you see it now?
▲ The US is trying to contain China and is engaged in a tariff war. We don’t know what will happen in the next few years, but I believe China will eventually overcome these challenges. Structural adjustments like real estate issues are ongoing and may be resolved over time. China has both strengths and weaknesses, but democracies like the US and Korea lack policy consistency. Even US policies under Trump may change again.
China may lag in private autonomy and creativity, but the government is concentrating national power on advanced industries like robots, drones, solar power, and electric vehicles to become the world’s best. It is questionable whether the US can keep up. It will take a long time for China’s overall economy to surpass or equal the US, but in advanced strategic industries, China will not lag and may soon overtake.
- The US is trying to contain China in advanced industries like semiconductors.
▲ Regulations do not work as intended. No matter how much North Korea is sanctioned, smuggling and other means bring in what is needed. That is the market and human nature. During the US Civil War, the turning point near Philadelphia was due to food shortages in a cold winter. One side’s army passed a price control law to punish those charging above a certain price. But people withheld food and sold it to the enemy, risking their lives. After the war, the Continental Congress passed a law banning price controls.
- How will the decline of globalization proceed? Broad scenarios might be: 1) the end of globalization like in the 1920s-30s, 2) globalization excluding China, 3) globalization excluding the US.
▲ It seems to be a kind of multipolarization. Not just US-China bipolarity, but if Trump’s policies continue, the European Union (EU) may become an independent hub, and the US and China will each go their own way. Economic bloc formation may proceed. Many countries already straddle both sides. Such countries will increase, and Trump’s America may become relatively isolated.
- What about globalization excluding the US?
▲ That is possible, but unlikely during Trump’s term. Regardless, 80% of global transactions are in dollars, which cannot be denied. Major systemic changes would require a long period of gradual policy continuation under Trump. I expect multipolarization to expand.
- Considering China advocates free trade, is globalization excluding China impossible?
▲ China wants free trade because it is competitive in industries like manufacturing that advanced countries avoid. The US would be fine if China only did that, but since China is encroaching on advanced industries, the US cannot accept it. From our perspective, our domestic market is small, so we have benefited from free trade. A shift from free trade to protectionism would be undesirable for us.
Jeong Gap-young, Former President of Yonsei University (74)
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