Posted December. 13, 2017 08:26,
Updated December. 13, 2017 08:48
Concerns are rising over policies to be implemented early next year and their possible impact on the employment market, as construction workers, apartment security guards, waiters, waitresses and other workers in similar line of jobs might end up jobless. The Construction Economy Research Institute of Korea prospected Tuesday that the social overhead capital (SOC) for next year might be reduced by 3.1 trillion won, or 14 percent, from this year, which would lay off 43,000 workers. There is a fat chance of SMEs and small business owners cutting off the number of their employees if the minimum wage increases by 16.4 percent to an hour wage of 7,530 won and holiday work pay rises due to cuts in work hours. In other words, policies that are supposed to drive up the quality of welfare and employment might make workers more vulnerable.
Small and medium-sized businesses with less capacity to mobilize cash and their employees are the first to bear the damage of economic downturn. Nearly 50,000 jobs including security guards, building managers, janitors, customer service center operators and hospitality and food industry workers have already been cut in October alone. The construction industry is said to have been relatively unaffected, but there are a lot of negative prospects about employment after current demands to construct apartments are depleted. During the period, lawmakers tended their own districts only, and turned a blind eye to the SOC budget cut. A sizeable number of jobs in the entire market might disappear if high oil price, high interest rate and currency appreciation drive down economic growth.
Reducing uncertainties in businesses as well as providing supports to workers is a prerequisite to create a virtuous cycle of improved business performance and higher employment rate. However, the government’s September decision to scrap policies to raise flexibility in the employment market such as the wage peak system is becoming an obstacle. Chairman Park Seong-taek of the Korea Federation of SMEs said Tuesday, “The National Assembly should pay more attention to SMEs that account for 90 percent of the employment market, rather than interests of large conglomerates where only 10 percent of the entire workforce is employed.” Park’s remark points out that the Moon Jae-in administration’s labor union-friendly policies do not benefit workers or businesses at all.
Finance Minister Kim Dong-yeon highlighted the importance of “public-private partnerships to boost innovative growth and create jobs” Tuesday, while calling for participation of all businesses. To do so, however, the government should find a solution for current issues, which directly affect jobs for socially vulnerable groups. With the SOC budget already been set and limited amount of government-led construction investments, the wise move would be to contemplate on ways to bring in more private investments to disadvantaged areas. It might be difficult to resolve the looming employment catastrophe without gradually implementing work hour cuts and including bonuses and costs of food and accommodations in the minimum wage.