ED Address structural problems

Scarce jobs, soaring home prices lead to low birthrate

The Board of Audit and Inspection (BAI) said Friday that the country has made little progress in boosting the birthrate despite spending 380 trillion won ($325 billion) over the past 15 years. While announcing the results of its audit on the government's demographic policy, the state agency also released a report analyzing the causes of the low birthrate, which pointed out that high private educational costs, runaway housing prices and high jobless rates have pulled down young people's desire to have children. All of these indicators have continued their trajectories under the Moon Jae-in administration.

Private tutoring costs have jumped 25 percent because of the government's inconsistent college entrance system. In addition, ill-conceived real estate policies have pushed home prices in Seoul up 86 percent in four years. Worse still, excessively rapid minimum wage increases have brought down the annual net growth of jobs to the 5,000-mark. To sum up, the government has allowed the socioeconomic environment to worsen, which encourages people to avoid having children. All the while, it has been spending taxpayers' money without producing any successful results.

The total birthrate ― the average number of children a woman chooses to have in her lifetime ― fell from 1.17 just before the May 2017 inauguration of the Moon administration to 0.84 in the second quarter of this year, the lowest among 37 OECD member nations. Last year, Korea became a country with a natural decline in the population. Population decreases adversely affect the country's labor supply, dampen domestic demand, and discourage investments, throwing the economy into a slump. The start of a drop in the working-age population (15 to 64 years old) in 2020 will be a big burden on the economy. Even under these circumstances, the government is trying to get out of the imminent difficulties by only increasing budgetary spending instead of addressing structural problems.

A persistent fall in the number of decent jobs makes it more difficult for people to buy their own house. Combined with a growing tax burden, young people find it more difficult to marry and have children. Thus, financial support cannot on its own do the trick to boost the birthrate unless the government offers hope for the future to younger generations. It is imperative to find fundamental solutions by providing more decent jobs, affordable homes and equal educational opportunities for young adults.