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Cheong Wa Dae says rise in unemployment rate inevitable

All Headlines 11:36 September 12, 2018

SEOUL, Sept. 12 (Yonhap) -- The presidential office Cheong Wa Dae reaffirmed its resolve to continue its economic reform Wednesday, calling a recent increase in the unemployment rate inevitable pain.

"We are going through a truly difficult and arduous period. We believe it is the pain that accompanies a change in the constitution of the economy," Cheong Wa Dae spokesman Kim Eui-kyeom told reporters when asked about a rise in the jobless rate in August.

The finance ministry said the country's jobless rate came to 4.0 percent last month, up 0.4 percentage point from the same month last year.

What apparently is more alarming is that the country added only 3,000 new jobs over the cited period, compared with more than 100,000 new jobs added on-year in June.

The increase in jobs in August marked the slowest growth since January 2010.

"The government will come closer to the people. It will pay more attention to the people's voice," Kim told a daily press briefing.

His remarks, however, come amid growing calls for the government to at least partly revise its key economic policy, namely the income-led growth strategy.

The strategy seeks to boost the wages of low income earners, which in turn is expected to lead their increased spending.

To this end, the country has increased its minimum wage to 7,530 won (US$6.68) per hour at the start of the year, up 16.4 percent from 2017. The minimum wage is again set to jump 10.9 percent to 8,350 won per hour at the beginning of next year.

Such a steep rise has widely been blamed for the apparently slowing increase in the number of new jobs. The country added only 5,000 jobs from a year earlier in July, according to an earlier report from the statistics office.

President Moon Jae-in has dismissed calls for a change to his income-led growth strategy, saying the policy affects only a small group of workers or those in the lowest income bracket.

Instead, he insists now may be the last chance for the country to reform its economic structure and that such a change is necessary, even at a high cost, to ensure the sustainability of the local economy.


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