Number of Public Institution Employees Increased by 120,000 Over 5 Years Under Moon Administration

Twice the Previous Government... New Hires Actually Decrease Amid Zero Non-Regular Worker Policy Impact

[Asia Economy Sejong=Reporters Kwon Haeyoung and Lee Junhyung] The number of employees at public institutions increased by nearly 120,000 during the five years of the Moon Jae-in administration. This figure is double that of the Park Geun-hye administration, reflecting the Moon administration's focus on producing "government-controlled jobs" centered on public institutions, under its early slogan of a "job-creating government." However, as public institutions bore the costs of policy implementations such as "zero non-regular workers" amid the economic downturn caused by the COVID-19 pandemic, the scale of new hires actually shrank.

According to Alio, the public institution management information disclosure system, the number of employees at public institutions surged by 35% (115,091 people) from 328,479 in 2016, before the Moon administration took office, to 443,570 at the end of 2021.

The number of employees at public institutions steadily increased each year: 345,923 in 2017, 383,373 in 2018, 420,336 in 2019, and 435,734 in 2020, approaching 450,000 in 2021. The growth rate of public institution employees last year was 1.8%, which slowed compared to 5.3% in 2017, 10.8% in 2018, 9.6% in 2019, and 3.7% in 2020.

This slowdown was largely due to the continuous decrease in new hires for two consecutive years in 2020 and 2021. New hires increased from 22,536 in 2017, the first year of the administration, to 33,896 in 2018 and 41,336 in 2019, but dropped to 30,735 in 2020?the first decline since the global financial crisis in 2009?and further decreased to 27,034 in 2021. Analysts attribute this to increased management burdens on public institutions due to COVID-19 and rising labor costs following the government's zero non-regular worker policy, which reduced the capacity for new hiring.

For example, Korea Electric Power Corporation (KEPCO) converted over 8,000 non-regular workers to regular positions within three years of the current administration's launch, but new hires fell sharply by 40.9%, from 1,772 in 2019 to 1,047 in 2020. Labor costs increased by approximately 370 billion KRW over four years since the current administration began. Total labor costs at public institutions rose 32%, from 22.95 trillion KRW in 2016 to 30.3 trillion KRW in 2020.

In particular, energy public enterprises such as KEPCO face astronomical costs supporting government policies like nuclear phase-out, coal phase-out, and expanded investment in renewable energy, which further intensify financial burdens. For instance, KEPCO must compensate power producers for renewable energy electricity purchase costs, which amounted to 1.612 trillion KRW in 2017, 2.0474 trillion KRW in 2019, and is expected to exceed 3 trillion KRW annually by 2021.

As public institution management has been driven by "political logic" rather than "economic logic," their financial performance has sharply deteriorated under the current administration. Net income of public institutions shrank to one-third, from 15.7 trillion KRW in 2016 to 5.3 trillion KRW in 2020, while liabilities increased from 500.3 trillion KRW to 544.8 trillion KRW during the same period.

The corporate value of listed public enterprises also declined significantly. According to the Korea Exchange, from shortly after President Moon's inauguration to the present (May 10, 2017, to February 18, 2022), stock prices of seven out of eight listed public enterprises fell, resulting in a total market capitalization loss of approximately 17.13 trillion KRW.

Professor Hong Giyong of Incheon National University's Department of Business Administration pointed out, "The government's policy of converting non-regular workers to regular positions has greatly increased labor costs for public enterprises. If regularization is pursued recklessly without considering the management environment and workforce supply and demand of public enterprises, it inevitably leads to deterioration of financial structure."

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