Back To Top

[Editorial] The right direction

Yoon holds meeting with business lobbies, vows to let the private sector lead growth

President-elect Yoon Suk-yeol said in his luncheon meeting with the chiefs of six major business lobby groups Monday that the government’s job is to remove institutional obstacles so that businesses can decide more freely, invest freely and grow.

He also said that the government is focused on establishing infrastructure so that companies will spearhead the creation of jobs and make investments, which will eventually help the nation grow.

The administration under President Moon Jae-in has kept a pro-labor, anti-corporate line for five years. Industrial relations were lopsided in labor’s favor. Yoon is committed to correcting the uneven playing field. In his first press conference after he won the presidential election, he vowed to set the market economy right. The Moon administration has often intervened in the market, but Yoon intends to let the private sector lead economic growth.

The Moon administration practiced an absurd income-led growth theory which asserts that if the government forces an increase in income, demand will increase and the economy will grow. Income is the result of growth, but the administration viewed it as the driver of growth. It was like putting the cart before the horse. The minimum wage was hiked sharply, and things got hard -- particularly for small self-employed businesses. Many part-time jobs vanished.

Businesses were pressured by a wide array of regulations such as a strict 52-hour workweek and a controversial severe punishment on top managers for serious industrial accidents. On the contrary, the Moon administration accepted most of labor groups’ demands.

A web of controls and regulations demotivated investment. Above all, illegal violent acts by the Korean Confederation of Trade Unions has made it tougher to do business in Korea.

Last week, a member of the Cargo Truckers Solidarity under the confederation secretly pulled out an air brake hose from a truck of a non-member at a factory of Hankook Tire & Technology. If the truck had been operated, it could have caused a major accident. Some members of the solidarity have obstructed the business of non-member drivers in front of the factory from early January. Parcel delivery truck drivers of the solidarity illegally occupied part of CJ Logistics headquarters for 19 days, while police looked on.

Illegal behavior by union members must be handled strictly according to the law. Companies should be given an option to use an alternative workforce when workers strike. The rigid 52-hour workweek needs to be practiced flexibly. Minimum wage should be adjusted in step with productivity and inflation. The punitive corporate tax system ought to be modified.

It is meaningful that the chief of the Federation of Korean Industries attended the meeting. It is the first time in five years that the federation, which represents large companies, is joining the other five business lobbies in putting forth their opinions.

Most large companies have played an important role in Korea’s economic growth, but the Moon administration has treated them as an object of reform and passed over their representative body.

Encouraged by such negativity toward large companies, unions have demanded more -- sometimes violently -- despite their members receiving high salaries. In such a business environment, it is hard for the economy to grow.

Yoon promised to set up a hotline to communicate directly with chiefs of the six business lobbies. He may be unable to use it as freely as he wants due to a tight schedule. However, he must not quit midway through. He must try to utilize it consistently until the end of his term.

The Yoon administration, which will be launched in about 50 days, faces a pile of difficult economic problems. They include surging prices of raw materials and supply chain disruptions. The government and businesses must join forces, and the meeting should be a starting point to overcome crisis.

By Korea Herald (khnews@heraldcorp.com)
MOST POPULAR
LATEST NEWS
padcast
Korea Herald Youtube
subscribe