South Korea’s unemployment rate in August hit its highest rate since 2010 as the Moon Jae-in administration pursues a controversial policy of “income-led growth.”
According to a government report on jobs quoted by local media, unemployment rose to 4.2% in August from 3.8% in July – the highest rate South Korea has suffered since 2010, when the country was grappling with the fallout from the global financial crisis.
The retail and accommodation sectors led the losses, but manufacturing also shed positions. There was, however, some pick up in construction, transport and agriculture.
The findings are leading the government to question one of its own flagship policies – a 16% minimum wage increase this year, with further rises set for next year – which have led to massive criticism and even protests from small business owners.
In a policy meeting on Wednesday, Finance Minister Kim Dong-yeon said the government “will discuss slowing the speed of minimum wage hikes with the ruling party and the presidential office,” according to Reuters. Kim added he did not expect a short-term recovery in the job market, Reuters noted.
Youth unemployment and underemployment has been a perennial problem for South Korea. It is a particular issue for the Moon administration, which has strong support from the young and which has pledged to root out “deep-rooted evils” and create a fairer society.
One of those “evils” is power abuse by big business, but – like his predecessors in the presidential Blue House – Moon’s criticisms of big business have not been translated into policy after entering office.
Moon loses luster
Moon is suffering the fallout from the latest fugures.
The popular and populist president, who took office in 2017 after the ouster of now-jailed conservative Park Geun-hye, has enjoyed sky-high ratings not only for his “breath-of- fresh-air” approach – he is often seen in public posing for selfies with citizens and has an undeniably “nice guy” persona – but also for his winning ways in international diplomacy, notably towards North Korea.
However, his numbers have now fallen, for the first time, below the 50% mark, according to a Gallup Korea poll taken last Friday. The poll found Moon’s popularity was 49% – which, by the standards of most democratic presidents, is a strong figure, but represent Moon’s lowest number ever.
However, the poll’s most telling finding was that 60% of respondents were critical of his economic management.
Moon will be meeting North Korean leader Kim Jong Un for their third inter-Korean summit next week, where Moon hopes to find a breakthrough on denuclearization and mediate between North Korea and the US. He is then expected to meet US President Donald Trump at the UN General Assembly in New York at the end of the month.
Whether these high-profile diplomatic efforts will return Moon’s popularity to his accustomed numbers is uncertain. Popularity matters for single-term Korean presidents, who customarily suffer “lame duck” periods in the last one or two years of their five-year terms, when bureaucratic intransigence sets in and presidents are unable to push policies through ministries.
Moon, however, enjoys one significant political advantage. The conservative opposition is in such disarray in the aftermath of the Park impeachment that it is an opposition in name only.