Moon Administration's 'Job Policy' Led by KEPCO... Labor Costs Increased by '1 Trillion'

19,000 Hired Over the Past 5 Years... Labor Costs Increased by 960 Billion Won
"KEPCO's Excessive New Hiring... Fueling Electricity Rate Hikes"

Korea Electric Power Corporation Seoul Headquarters located in Jung-gu, Seoul. [Photo by Yonhap News]

[Asia Economy Sejong=Reporter Lee Jun-hyung] It has been revealed that the labor costs of power group companies, including Korea Electric Power Corporation (KEPCO), have increased by nearly 1 trillion won over the past five years. There are criticisms that power group companies excessively expanded their workforce in line with the previous government's policy, thereby increasing factors that lead to electricity rate hikes.

According to data submitted by power group companies to the office of Ku Ja-geun, a member of the People Power Party, labor costs of KEPCO, its subsidiaries, and five power generation public enterprises rose from 3.2038 trillion won in 2017 to 4.1647 trillion won last year, an increase of 960.9 billion won. During the same period, these companies hired 19,010 new employees.

Specifically, KEPCO hired 7,719 new employees from 2017 to last year. Considering that KEPCO hired 4,672 new employees in the five years before the Moon Jae-in administration (2012?2016), the number of new hires nearly doubled. KEPCO subsidiaries such as KEPCO KDN and KEPCO KPS also hired 4,698 new employees over the past five years. Consequently, labor costs for KEPCO and its subsidiaries increased by 642.8 billion won, from 2.3087 trillion won in 2017 to 2.9515 trillion won last year.

The situation is similar for the five power generation public enterprises under KEPCO. These enterprises, including Korea South-East Power, increased their new hires by 3,621 over the past five years. Labor costs for the five power generation subsidiaries rose by 318.1 billion won, from 895.1 billion won in 2017 to 1.2132 trillion won last year.

The significant increase in new hires at these companies is due to the Moon Jae-in administration's job creation policy. When the previous government took office in 2017, "job creation" was a major campaign pledge. It also proposed creating 810,000 public sector jobs, including 174,000 civil servant positions and 340,000 jobs in public social service institutions.

The problem is that once public institution jobs increase, they are difficult to reduce. Since public institutions guarantee employee retirement age, hiring new staff inevitably leads to a steady increase in labor costs for decades. The excessive workforce expansion by power group companies over the past five years could affect future new hires as well. In fact, KEPCO hired only 406 new employees from the beginning of this year through last month. This is only about 23% compared to 1,780 new hires in 2018, the second year of the Moon Jae-in administration.

There is also a view that the reckless workforce expansion by power group companies is fueling electricity rate hikes. Representative Ku said, "Due to the previous government's reckless expansion of public sector jobs, KEPCO and power generation public enterprises also engaged in excessive new hiring, which ultimately boomeranged back as electricity rate increases."

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