On Seongnam Mayor Lee Jae-myeong's Facebook page is a cover photo with a campaign slogan reading “South Korea cannot, but Seongnam can."

The slogan might sum up a series of challenges Seongnam, the second largest city in Gyeonggi Province, has taken on to improve its citizens’ living standards through welfare programs aimed at helping those on the edge of society.

Seongnam, some 20 kilometers away from Seoul, has drawn attention among other cities and provinces nationwide in recent months as the mayor pushed for several policy experiments such as the universal basic income for the young.

In a New Year’s address, Mayor Lee, the second-term mayor of Seongnam, expressed his determination to set the city as an example for other municipalities to benchmark against.

“For the past year, Seongnam proved that a city is able to stabilize its finances by eradicating corruption, reducing waste of budget and imposing taxes more fairly,” Lee said in the speech.

Lee has normalized the debt-stricken city since he took office as the mayor of Seongnam in 2010, paying down the debt of 730 billion won ($608 million) through budget cutbacks. In 2014, Seongnam was evaluated as the most financially independent city in the nation.

“With the finances, the city was able to implement the nation’s highest-quality welfare programs,” Lee said. “Seongnam is more just a city, setting itself as an example and standard for the rest of 226 cities in Korea to follow.”

Seongnam, which has a population of nearly 1 million, has expanded welfare for every citizen through three key programs -- Youth Dividends, free school uniforms and post-pregnancy care system.

Seongnam became the first city in the nation to carry out a policy, named Youth Dividends, to financially support young adults who need living expenses and job training fees amid high unemployment.

The jobless rate among young people between 15 and 29 years old stood at 9.2 percent nationwide last year, much higher than the 3.6 percent unemployment rate for the country as a whole, according to government data.

Under the scheme, the municipality offers gift vouchers worth 500,000 won each year to Seongnam residents aged 24 who have lived in the city for at least three years. The vouchers can only be used in stores, restaurants, gas stations and parking lots in Seongnam, which the mayor said would boost the local economy.

Inspired by the idea of an unconditional basic income that is increasingly being discussed in Europe, the city allocated a total of 11.3 billion won for Youth Dividends. A basic income is an income unconditionally granted to all on an individual basis, without conditions or work requirements. 

Nearly 90 percent of the young residing in the city took the vouchers within a week.

Some 26 associations of merchants based in Seongnam also welcomed the welfare program promoting the use of vouchers, which they said spurred spending in the city. Thanks to Youth Dividends, spending through the vouchers is expected to reach 22 billion won, up 65 percent from a year earlier.

Kang Nam-hoon, an economics professor and pioneer of the basic income movement in South Korea at Hanshin University, said in his report that the implementation of Seongnam’s welfare programs would create 207 jobs, spark 19.2 billion won in production a year and add additional value of 11.3 billion won.

Aside from the policy, the city government decided to offer free school uniforms to 8,900 students entering middle school this year, allocating 2.5 billion won for the program. The city granted the students 150,000 won this year, but it plans to offer school uniforms made by the city’s clothing cooperative instead of money starting from next year.  

As part of its efforts to help mothers with postnatal care, Seongnam provided them with subsidies worth 250,000 won in vouchers, marking it as the first of its kind among municipalities in the nation. As of Jan. 27, 66.5 percent of the mothers had picked up the subsidies at community service centers.

But the Seongnam-initiated welfare programs have been consistently objected to by the central government and the ruling party, claiming they were a waste of tax money and politically motivated.

The central government revised the Local Subsidy Act to slash the budget for Seongnam City last December to put the brakes on the municipality’s welfare programs. The ministry has even filed a petition with the Supreme Court in a bid to suspend the program.

In response, Seongman Metropolitan Government filed a petition with the Constitutional Court. Mayor Lee said the central government’s action not only violates local autonomy, but interferes with the municipality’s policies to enhance their citizens’ welfare within budgetary capacity.

The city also stepped up measures to reinforce safety, medical security and education for its citizens.

Last year, a patrol team composed of 54 Seongnam citizens was launched to enhance the security of their neighborhoods. The tasks included patrolling the city, taking women and children home safely, securing parcels and delivering them, fixing houses for the marginalized and taking patients to hospitals. 

The city put in 15.9 billion won to help schools provide their students with eco-friendly free lunches, help university students pay for their college loans and offer educational assistance for children from less privileged homes.
 

Seongnam is also eyeing an expansion of inter-Korean exchanges and protection of labor rights. The mayor vowed to find more ways to bolster humanitarian, cultural and industrial exchanges between the two Koreas through a newly established committee. He also said that he would help laborers in the city organize themselves to improve their negotiating power.

To make welfare programs gain even more momentum, Lee called on Seongnam citizens to participate in politics and take more interest in society in his New Year’s speech.

“Rights are guaranteed to people who ask for them and act on them,” Lee said. “Representative democracy can only be run in a good manner when citizens participate.”

By Ock Hyun-ju (laeticia.ock@heraldcorp.com) and Park Joung-kyu (fob140@heraldcorp.com)