Every time employment indicators are released, Hong Nam-ki posts on Facebook... Emphasizing 'Fiscal Policy' throughout the year

Repeated Direct Job Support and Supplementary Budget
Emphasizing Only Positive Aspects by Removing Seasonal Factors
Resulting in the 'Worst Employment Indicators'

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Every month when last year's employment performance was announced, the message from the head of the government economic team appeared to be focused solely on pumping money into the economy. Rather than revitalizing the frozen private sector, fiscal measures aimed at short-term effects were frequently employed. The result was the worst employment shock in 22 years.

On the 14th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance (photo), summarized his Facebook messages released after employment indicator announcements over the past year, revealing that the key theme was fiscal policy. Since March last year, when the impact of the novel coronavirus infection (COVID-19) began in earnest, direct job support and supplementary budgets (추경) were repeatedly implemented. In January last year, when COVID-19 spread domestically, Deputy Prime Minister Hong's focus was on jobs for people in their 40s. As the number of employed persons in this core economic age group continued to decline amid a job recovery trend, he promised to introduce age-tailored measures.

However, when the number of employed persons decreased by 195,000 in March of the same year, he expressed "a heavy sense of responsibility" and introduced an employment stability package policy. When employment fell by 277,000 in July, he pledged to execute 575,000 direct job projects. In September, November, and December, he mentioned either supporting direct jobs or preparing supplementary budgets. Ultimately, every time the employment figures worsened, fiscal patchwork was repeated. Private sector job support programs, which involved giving money to companies, failed to achieve the desired results.

Amid ongoing employment shocks across all industries and age groups, forced interpretations were also presented. Regarding the employment performance in July last year, when more than 270,000 jobs were lost, Deputy Prime Minister Hong evaluated that "excluding seasonal factors, the situation is improving compared to the previous month," and about the December employment trend announced the day before, he said, "Considering the base effect, the government had already prepared livelihood support and employment stability measures."

Statistics Korea mainly uses year-on-year monthly comparisons rather than month-on-month comparisons to account for seasonal factors in employment trends. Deputy Prime Minister Hong deliberately removed seasonal factors and explained that the situation improved compared to the previous month. He also said that the large increase of 516,000 in December last year was due to the base effect.

However, the effect of job creation through fiscal spending has reached its limits. Deputy Prime Minister Hong himself admitted, "It will be difficult for the number of employed persons to increase in January and February."

Professor Kim Sang-bong of Hansung University’s Department of Economics commented, "Continuously maintaining optimistic forecasts shows that we did not really know what to do at present." He added, "Most jobs created through fiscal input are short-term jobs of poor quality," advising, "Job measures should be precisely designed according to the degree of employment shock."

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