The first instruction President Moon Jae-in gave on his first day in office was to take all policy measures to turn nonregular jobs into regular ones. During his election campaign, he pledged to give all temporary workers in the public sector permanent status if he assumed the presidency.
Moon, who took office in May 2017, may well feel embarrassed about data released this week that showed the number of nonregular workers and their proportion in the country’s workforce reaching record-high levels on his watch.
Temporary workers in South Korea numbered 7.48 million as of August, up 867,000 from a year earlier, accounting for 36.4 percent of the country’s 20.55 waged workers, according to the data from Statistics Korea. The figures marked the highest since the state statistics office began compiling related data in 2003.
Kang Shin-wook, head of the statistics agency, attributed the steep increase in the number of temporary workers to a new method of tallying, which categorized more fixed-term contract employees as nonregular workers.
Excluding the effect, the number of nonregular workers was estimated to have climbed by between 350,000 and 500,000 over the cited period. The increase is still alarming, given that the corresponding figure for the year through August in 2018 was a mere 30,000.
Furthermore, the top state statistician made no mention of the reasons the number of regular workers shrank by more than 350,000 on-year in August, marking the first decline in a decade.
Moon and his aides have insisted that employment has improved in both quantity and quality. But they should now take a serious look at the implications of the latest data.
The deepening polarization of the labor market appears to stem mainly from the income-led growth policy pursued by the Moon administration amid a protracted economic downturn. A steep increase in the minimum wage and other pro-labor measures taken to implement the misguided policy has increased the burden on companies, compelling them to cut personnel expenditures.
The number of full-time employees working more than 36 hours per week has decreased by nearly 1.2 million over the past two years. The manufacturing sector shed mostly regular jobs for 18 consecutive months through September. The number of workers in their 30s and 40s, who are more likely to be hired on a regular basis than those in other age groups, also decreased for the 24th consecutive month in September.
Various employment programs funded by fiscal spending have created a massive number of low-paid temporary jobs, most of which have been taken by elderly people. Over the past year, more than 70 trillion won ($60.2 billion) in taxpayers’ money has been spent paying people to pick up trash in neighborhood parks and markets, clean solar panels, turn off lights in classrooms and perform other simple manual tasks.
People in their 60s and older accounted for 25.4 percent of temporary workers in August, followed by those in their 50s at 21 percent.
It is notable that nearly 20 percent of nonregular employees were in their 20s, which means youths have difficulty landing decent jobs as the Moon administration’s labor-friendly stance has strengthened rights mainly for regular workers at large companies and public institutions.
It is necessary to take measures to make the labor market less rigid so that young job seekers can find more opportunities to work as regular employees.
A widening gap in wages between regular and nonregular workers deepens the polarization of the labor market. The average monthly wage of temporary employees remained at 1.72 million won for the June-August period, while the corresponding figure for regular employees reached 3.16 million won. The wage difference was the largest since 2003, when the government began compiling related data.
The Moon government now needs to abandon its ill-conceived policy and focus on regulatory and labor reforms to encourage private companies to increase investment and hire more workers.
In recent months, Moon seems to have been attempting to craft a corporate-friendly approach. He should reassure the business community by turning his pledges into concrete actions.
With his five-year presidency about to pass the halfway point next week, Moon is running out of time to turn things around. As tax revenue is expected to decline down the road amid a prolonged economic slump, it may become difficult to add even temporary jobs with government spending.
Before it is too late, Moon should give serious thought to the results that we are likely to see from his first instruction as president by the day he leaves office.