December 18, 2018 11:08
President Moon Jae-in on Monday signaled a climbdown on the labor and economic policies that have most disastrously backfired and promised to stimulate private-sector growth.
Chairing a meeting of economy-related officials, Moon said, "It is important to pursue new economic policies like the minimum wage hike and shortened working hours in harmony with social circumstances so the public can accommodate them."
"If necessary, we will have to come up with complementary measures," he added.
There are indications that the drastic minimum wage hike has in fact left low-income workers worse off because employers are cutting their hours or firing them, while a cap on the working week has left many menial workers who rely on overtime pay out of pocket.
But Moon added, "Wages and household incomes have generally increased, while start-ups and venture investments have grown markedly and unfair business practices have been greatly reduced." It was a broad hint that he has no intention of overhauling the basic framework of his income-led economic policies.
The government expects the economy to grow between 2.6 and 2.7 percent next year. "Difficulties persist in the everyday lives of citizens in terms of employment and distribution of wealth in the process of this paradigm shift, while domestic and external conditions remain tough next year," a government spokesman admitted.
The "paradigm shift" seems to mean the government's efforts to wean Korean employers off their habit of working their staff for some of the longest hours in the world on low wages, which has proved too entrenched to overcome with a few drastic measures in the midst of a slump.
The government now projects the number of employed people to increase by just 150,000 next year, less than half its previous forecast. It also decided to frontload 61 percent or W286 trillion of next year's budget in the first half to stem a further slowdown of the economy (US$1=W1,132).
Sung Tae-yoon at Yonsei University said, "It looks like the government's confidence in its economic policies has weakened considerably. The growth forecast of 2.7 percent seems very optimistic, while 2.6 percent sounds like a more realistic target."
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