Public Institutions Expanded, Net Profit Reduced to One-Third in 4 Years Under Moon Administration

[Sejong=Asia Economy Reporter Son Seonhee] Since the inauguration of the Moon Jae-in administration, the net income of public institutions has sharply declined. On the other hand, the workforce in public institutions has increased every year, growing by more than 100,000 people in just four years. The size has become bloated while profitability is gradually deteriorating.

According to the government and public institution management information disclosure system (ALIO) on the 16th, the annual net income of 350 public institutions (public enterprises + quasi-governmental institutions + other public institutions) last year was 5.3 trillion won. Compared to 2016, the last year of the Park Geun-hye administration (15.7 trillion won), this is about one-third of that level.

The net income of public institutions has steadily decreased every year since recording 7.3 trillion won in 2017, the first year of the Moon Jae-in administration, and at one point faced a deficit crisis. In 2018 (700 billion won) and 2019 (800 billion won), the net income of all 340 public enterprises hovered below 1 trillion won. During the Moon Jae-in administration, the average annual net income was only 3.525 trillion won.

In particular, if we look only at market-oriented public enterprises, the deterioration in profitability is even more pronounced. The net income of public enterprises, which was 9 trillion won in 2016, fell to 4.2 trillion won in 2017, 2 trillion won in 2018, 1.2 trillion won in 2019, and recorded a deficit of 600 billion won last year.

While profitability has deteriorated like this, the workforce in public institutions has increased sharply. The total number of employees in public institutions was about 328,400 in 2016 and about 435,700 last year. This means an increase of 107,300 people (an average of 26,800 people per year) in just four years. This appears to be the result of the government increasing new hires in the public sector, aiming to play the role of a 'primer for the labor market.' However, compared to expectations, the creation of private sector jobs remains insufficient, and rather, along with the deterioration of profitability, it reveals a limit situation where the burden of labor costs in the public sector only increases.

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