ED Upsurge in poor people
Take practical measures to create jobs
The number of people living below the official poverty level has jumped 25 percent over the past three-and-a-half years. The number surged to 2.72 million in November, up 550,000 from May 2017 when President Moon Jae-in took office, according to data submitted by the Ministry of Health and Welfare to an opposition lawmaker.
Policymakers, however, downplayed the seriousness of the surge, noting that it was a change in the criteria for poverty that was behind it. They explained the Moon government eased the criteria to provide state aid to more low-income earners. The economic fallout from the COVID-19 pandemic has also put more people into poverty amid mass layoffs.
Yet government officials and ruling party lawmakers should not overlook the stark reality. They need to recognize that policy failures have also caused the problem. President Moon has pushed an “income-led” growth policy aimed at boosting incomes for workers, especially poor ones. His policy was focused on raising the minimum wage. For the past three years, the minimum wage has shot up by 30 percent.
However, the policy has forced small businesses and the self-employed to cut down on their number of employees in a desperate bid to reduce labor costs. Consequently, the Moon administration has suffered a setback in creating jobs. The number of day laborers and temporary workers shrank to 6.15 million last month from 6.36 million in 2019, 6.52 million in 2018 and 6.62 million in 2017. This downward trend shows the most vulnerable members of Korean society suffered more than anyone else due to the ill-conceived policy.
No doubt the best policy is to create jobs. But the question is how to do so. To be sure, the government cannot offer more job opportunities without drastically changing its ideology-oriented policy which lacks feasibility. Now it is time for Moon to figure out what has gone wrong with his income-led growth. He should work out practical and market-friendly measures because it is not the government but corporations that generate jobs.
It is, of course, difficult to find a magic solution in the face of the resurgent coronavirus. The provision of relief funds is inevitable to help individuals and businesses cushion the COVID-19 shock. But it cannot be a fundamental solution. Therefore it is necessary to hammer out comprehensive measures to help the poor stand on their own.
The Moon administration has already come up with its Korean New Deal projects to speed up the recovery of the recession-hit economy. As he promised, Moon should leave no stone unturned to offer more jobs through the so-called Green and Digital New Deal projects.
It is also equally important to narrow the widening income gap between the rich and the poor. People in the top 20 percent income bracket were found to earn 5.95 times more than those in the bottom 20 percent in 2018, an increase from 5.35 times in 2016 and 4.68 in 2012. The figure edged down slightly last year but is likely to go up again this year, possibly to over six times. The government must take action to tackle this polarization before it is too late.