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(EDITORIAL from Korea JoongAng Daily on Jan. 12)

All News 07:06 January 12, 2017

Reforms create jobs

As expected, a perfect storm is gathering over our economy. Statistics Korea, the government statistics office, announced Wednesday that the jobless rate for our young people reached 9.8 percent last year, the highest figure since 2010. The total number of unemployed in Korea exceeded 1 million for the first time ever after companies in the shipping and shipbuilding sector, in particular, went broke due to a severe depression in their industries.

The situation will most likely get worse as the government accelerates restructuring across the board this year. In that case, our young people will need longer times to find jobs than ever before. That will surely help push our overall jobless rate to the 4-percent range sooner or later.

The chill in our job market is in sharp contrast with global trends. In Japan, the job opening-to-applications ratio soared to 1.47 — the highest-ever number — thanks to abundant jobs created after the implementation of Abenomics. While Europe saw its overall unemployment rate fall to a single digit, the United States is happy with the steep plunge of its rate to 4 percent from over 9 percent during the global financial meltdown. In the United States, joblessness is expected to go even lower after President-elect Donald J. Trump takes office next week. He is bent on creating new jobs for U.S. citizens.

Trump is flexing his muscles to prevent U.S. companies such as Carrier, Ford and Fiat Chrysler from building plants in Mexico, while pressuring foreign companies to directly invest in America to create more jobs for U.S. workers. As a result, Alibaba founder and Chairman Jack Ma promised Trump he’ll create 1 million new jobs in the United States over the next five years and Japan’s Softbank Chairman Masayoshi Son pledged to invest $50 billion in the United States and create 50,000 new jobs. Korean companies are no exception.

Samsung Electronics and LG Electronics also are considering building plants in the United States.

We hope that our presidential hopefuls and other politicians look squarely at this toughest-ever external environment. Moon Jae-in, former chairman of the opposition Minjoo Party of Korea and a frontrunner in the polls ahead of the next presidential election, has come up with harsh chaebol reform plans that specifically mention the names of Korea’s top four conglomerates.

As revealed in an unprecedented abuse of power scandal involving President Park Geun-hye and her longtime friend Choi Soon-sil, changing our corporate governance structure is unavoidable to end the corruption and collusion between politicians and chaebol.

Nevertheless, a prudent approach is required because jobs are at risk if the government throws a wet blanket over large companies’ investment plans through more regulations.

It is time to devise ways to create new jobs even while reforming our big companies. To achieve that goal, lawmakers must first pass pending bills aimed at achieving labor reforms, development of the services industry and deregulation. That is the only way to overcome our job crisis.

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