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Time to focus on making policies more complete

Posted March. 12, 2018 07:31,   

Updated March. 12, 2018 07:31


As part of its efforts to resolve youth unemployment, the South Korean government declared to increase 810,000 jobs in the public sector during its term and the grounds for it is as follows: the employment rate in the public sector compared to the total number of people employed in South Korea was 7.6 percent according an announcement made in 2016 by the Organization for Economic Co-operation and Development (OECD), which is a club for advanced countries. This figure does not even reach half of the average rate in OECD member states of 21.3 percent. “We will be able to increase as much as 810,000 jobs in the public sector if we can reach half the rate of OECD’s average,” President Moon Jae-in said at an academy for state-examinations in Noryangjin, Seoul in February 2017. Half of the rate is 10.6 percent, which means South Korea will only need to bring up three percent. The number 810,000 was drawn given that 3 percent of 27 million, which is the number of the employed people in South Korea, is 810,000.

The pledge to raise the minimum wage to 10,000 won by 2020 has no clear ground. The general observation is that this is a “psychological expectation.” The problem is that in order to achieve this figure, South Korea needs to raise the minimum wage by 15.7 percent per annum. Small and medium- sized companies and businesses screamed out of frustration, which led to a need to slow down the speed. The government has not changed its direction. A raise of 16.5 percent, which exceeds the government’s goal, has already been carried out this year. The promise to voters is important. It is also, at the same time, true that not every pledge can be complete. That is why flexibility and coming up with a good strategy is so critical. The alarm that businesses are close to breaking point is ringing. In the near future, when the baby boomer generation (those born between 1995 and 1963) starts to become pensioners, the government will suffer a snowballing financial deficit.

France, which passed a “35 hours a week labor law” 20 years ago, is learning in the hard way. Le Figaro has reported that France is still paying for its 35 hours a week twenty years ago. This was a policy by the Socialist Party government to lower the unemployment rate. It resulted in, however, increased unemployment rate, increased burden on businesses, and lowered consuming power of households. The government ended up bearing more burden and the gap with Germany, which happened to accomplish labor innovation, grew even bigger. A good will does not always guarantee a good result.

The South Korean government already appears to have accomplished declarative and political goal through bold realization of pledges at the beginning of its administration. The Moon Jae-in administration has been in office for 10 months. Now is the moment to take some time and focus on the details to make its policies more complete. The government is hoped to come up with policies that become a win-win for everyone.