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(EDITORIAL from Korea Times on Oct. 24)

Editorials from Korean Dailies 06:55 October 24, 2018

Disastrous employment
Policymakers should listen to state think tank's advice

The state-funded Korea Development Institute (KDI) has pointed out -- again -- that weak demand for labor has led to an "employment disaster."

In a report analyzing the reasons for high unemployment, the think tank noted that until last year, the "mismatch" between labor demand and supply in industries had been the biggest cause of the rise in the jobless rate. This year, however, the overall drop in demand for labor exerted the most significant influence on soaring unemployment, it said.

The aggravated employment situation in the third quarter, in particular, cannot be explained by economic conditions or demographic structures alone, the KDI said. It insinuated that the Moon Jae-in administration's hasty labor policies, including the steep minimum wage hike, have resulted in the "job shock."

One does not need to look at the KDI report to see the dismal employment situation resulting from low demand. The reality reveals a more naked situation. The once numerous part-timers at cafes and restaurants are nowhere to be seen. Even hypermarkets with sufficient cash are curtailing business hours and trimming their workforces. University campuses are brimming with graduates who have yet to land jobs, and the labor market is full of people seeking daily jobs.

Some pro-government economists blame demography and the weather, which is far from convincing. According to Statistics Korea's estimate, the working-age population began to decline from last year, but the actual drop was slight at 7,000, too small a number to explain the plunge in new jobs to 45,000 last month from 300,000 a year ago. All this shows the main culprit is the government's hasty labor policy, resulting in businesses' reluctance to hire workers.

The KDI also offers solutions. The government should stir up labor demand by promoting innovative, high value-added industries. It should also inject more flexibility into the rigid labor market, allowing jobseekers to move freely between industries and workplaces.

Economic officials should start by acknowledging their policy blunders and coming up with more realistic and viable measures. If the government and the governing party stop being stubborn and change course, the employment crisis should not necessarily be an insurmountable obstacle.
(END)

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