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[Editorial] Employment pressure

Moon expects businesses to hire more while leaving tighter regulations intact

President Moon Jae-in said Monday that the responsibility to create good jobs ultimately falls on businesses, while the government can only provide its full support.

Moon made the remark during a luncheon at Cheong Wa Dae attended by chiefs of six business conglomerates he invited, including Samsung Electronics and Hyundai Motor.

What he said is quite reasonable, but that remark is the opposite of what his administration has done. If it wants companies to hire more people, it must lift or ease regulations that fetter business activities.

Moon hosted the luncheon to express his appreciation for their participation in a government-led youth jobs project called “Youth Hope ON.”

The administration came up with the project in August. Under the project, businesses train and hire people while the government supports training expenses. It looks like cooperation, but it is effectively pressure to increase employment.

Recruiting is one of the jobs businesses should do in accordance with their own judgment, but when it becomes a project involving the government, they must present their goals in concrete numbers and attend related events. In the end, the six companies promised to create 179,000 jobs over three years.

But the current business circumstances are not conducive to employment.

A recent Korea Enterprises Federation survey found that 35.4 percent of 243 companies with 30 or more workers have not even drafted their business plans for next year. The figure rose to 39.8 percent for businesses with fewer than 300 employees. Eight out of 10 companies are considering maintaining the status quo or entering retrenchment mode next year.

According to a Korea Economic Research Institute poll of top 500 companies in terms of domestic sales, 49.5 percent had neither intention nor plans to invest next year.

Probably, this is partly affected by the COVID-19 pandemic, but the Moon administration’s business-unfriendly policies play a big part.

The recently revised law on punishment for serious industrial disasters is a case in point. It punishes business managers, including chief executives, unconditionally when a worker dies due to an industrial accident.

The problem is that the law does not specify who in the management must be held responsible and what preventive measures could be taken to exempt them from the responsibility. The law is scheduled to take effect on Jan. 27, but it is still ambiguous on the issues.

In the laws on labor, environment and chemical substances, the number of clauses that could punish chief executives criminally is said to exceed 2,000. It would be hard to expect businesses to expand employment in this situation.

Despite a scientific view that net neutrality is impossible to attain without nuclear energy, the Moon administration set unrealistic net zero goals while obstinately pursuing nuclear phase-out. Some businesses asked the government to slow down its pursuit of the overambitious goal, but their requests were ignored.

As for the issue of job creation, the administration has made much of the public sector rather than the private one. Moon promised to increase government employees by 170,000 and has held fast to the pledge despite concerns about a bloated government sector. Just two days after being inaugurated as president, he visited Incheon International Airport Corp. and ordered it to hire all of the thousands of irregular workers belonging to its outsourced firms directly as its regular staff. It poured 120 trillion won ($101 billion) for five years to create 4.5 million tax-paid jobs but most of them were part-time and short-term. Rather, about 2 million full-time jobs vanished, manufacturing employment shrank and youth unemployment shot up.

On the contrary, the Moon administration shackled companies with pro-labor regulations. It raised minimum wage sharply and implemented a rigid 52-hour work week. Labor groups have become much more powerful, while businesses are distressed by a growing web of regulations. Every time businesses made suggestions, the government seldom listened.

And it easily calls business people together to put pressure on them to increase employment and investment. The Cheong Wa Dae luncheon on Monday does not look much different.

By Korea Herald (
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