"Reducing Personal Cost Burden" vs "High National Debt": Democratic Party's Debate on 'New Welfare'

Lee Nak-yeon "Will Present New Welfare System Plan Within This Year"
558 Trillion Won Budget for Next Year Passed... National Debt Also 956 Trillion Won

On the occasion of Child Abuse Prevention Day, Lee Nak-yeon, leader of the Democratic Party of Korea, visited the Seoul Municipal Child Counseling and Treatment Center in Dongdaemun-gu, Seoul, on the morning of the 19th of last month and held a meeting with officials.
[Photo by Yonhap News]

[Asia Economy Reporter Heo Midam] The government and the ruling party have announced plans to introduce a 'new welfare' concept within the year to support those facing employment crises due to the COVID-19 pandemic. The core idea of the 'new welfare system' is to extend employment insurance coverage to include self-employed individuals and freelancers, providing a form of allowance to those encountering life transitions such as employment, childbirth, and retirement. However, there are opposing views, with concerns that the government's financial burden, including national debt, will increase further due to the emergency disaster relief funds already disbursed.

The government aims to introduce 'universal employment insurance' by 2025, which would cover all working individuals, and is currently expanding employment insurance coverage to artists and workers in special employment types. The Democratic Party is pushing further to extend employment insurance to self-employed persons and freelancers, arguing that insurance benefits should also be provided to those whose employment status is not clearly defined between unemployment and employment.

Lee Nak-yeon, leader of the Democratic Party, stated at a housing sector field meeting held at Seoul Housing Lab on the 19th of last month, "We will present the new welfare system concept and housing plan within the year," adding, "We need to shift the existing welfare standards, which are tailored to low-income and disabled groups, to be age-specific."

Additionally, the Democratic Party is reportedly considering a 'transitional basic income' plan that would provide a type of allowance during significant life events such as employment, marriage, or retirement. This is a form of social allowance distinct from the universal basic income, which is regularly paid to all citizens.

The Democratic Party's 'customized welfare' policy has received positive evaluations for potentially easing individuals' financial burdens. Kim (25), a job seeker, expressed, "Due to COVID-19, jobs have decreased significantly compared to last year, and hundreds of applicants compete for good jobs. The anxiety and pressure of not knowing when I will find employment are considerable."

Regarding job preparation, Kim said, "The time and cost involved in preparing for employment are also burdensome. For example, most job seekers attend TOEIC academies or online lectures to achieve their desired TOEIC scores. The cost alone is at least several hundred thousand won. The TOEIC test fee is also considerable, about 45,000 won, and there is no guarantee that taking the test once will yield the desired score. Ultimately, I have to take the test at least three times, so the total cost for just preparing for TOEIC is substantial," he lamented.

He continued, "Not only TOEIC, but nowadays, certifications like computer proficiency or Korean history are also essential. These certificates are mandatory for good jobs, so I end up choosing part-time jobs to afford these expenses," adding, "If the government supports job seekers, it would be less burdensome to study for exams and certifications."

Job seekers in front of the job posting board. The photo is unrelated to specific expressions in the article. [Image source=Yonhap News]

Kim (30), who got married last year, also expressed support. He said, "Getting married involves many expenses, starting from the wedding hall to wedding photography and honeymoon. Even though I saved money for marriage since I was a young adult, it was still burdensome. Among my acquaintances, many say they 'cannot get married' because of these costs," adding, "The government’s support is not continuous but provided at important life moments, so I don't particularly want to oppose it." He further added, "If this policy is properly implemented, I think the marriage rate might increase somewhat."

On the other hand, some opposed the policy citing increased national debt. Another job seeker, Lee (27), said, "Supporting job seekers with tax money is not a fundamental solution to employment. Given the poor state of national finances, such support is not welcome from our perspective."

He continued, "The government is spending a lot on public job support, but there is criticism that these jobs are not long-term employment but one-off jobs," adding, "Even if it seems good now, in the long run, it is debt we have to repay. Given the financial burden from disaster relief payments, I don't think there is a reason to support job seekers."

Meanwhile, the National Assembly held a plenary session on the 2nd and passed the next year's budget bill amounting to 558 trillion won. This is about 2.2 trillion won more than the original government proposal of 555.8 trillion won. To secure the budget for the third round of disaster relief payments and vaccine inoculation in response to COVID-19, budgets for other sectors were significantly cut. However, due to insufficient funds, an additional 3.5 trillion won in government bonds will be issued. As a result, national debt has soared to 956 trillion won, and the national debt-to-GDP ratio reached 47.3%, both record highs.

This content was produced with the assistance of AI translation services.