South Korea’s President Moon Jae-in speaks during a special interview with KBS at the presidential office on May 9, 2019. [Photo provided by Cheong Wa Dae]
South Korean President Moon Jae-in hinted a moderation in the pace of minimum wage hike in light of the fragile economy and warned North Korea that provocation could upset the dialogue mood after it resumed missile test.
“We do not have to raise the minimum wage to 10,000 won ($8.48) by 2020 to meet the campaign pledge,” Moon said in televised interview with public broadcaster KBS on Thursday to mark the completion of his second-year office.
“The rapid hike in minimum wage over the two years has brought both positive and negative effects, and I believe the wage committee should come up with the optimum pace that our economy can accommodate.”
Under Moon’s economic campaign of income-led growth, the country’s minimum wage was raised by nearly 29 percent in two years, from 6,470 won to 8,350 won. But the steep minimum wage hike has been blamed for sluggish employment growth.
“The job growth slowed down noticeably over a year with year-on-year job addition dipping to 100,000 but the level rebounded to above 250,000 for two straight months in March. The government expects the trend to continue,” said Moon. “Given this pace plus supplementary budget, the county would be able to add 150,000 new jobs this year or even 200,000, exceeding the government’s goal.”
Despite the recent recovery in the country’s employment growth, the new additions have been mostly temporary jobs. “It has been necessary to create even short-time jobs for seniors because otherwise, they will end up with welfare programs,” said Moon.
[Photo provided by Cheong Wa Dae]
Moon expected the country’s economy would start to recover in the second half of this year. “The country’s potential growth rate will recover to mid-to-upper 2 percent range,” added Moon.
Asia’s fourth largest economy unexpectedly contracted 0.3 percent in the first quarter from the previous quarter, marking the worst performance in a decade. The Bank of Korea slashed its economic growth outlook for 2019 from 2.6 percent to 2.5 percent. But the government has maintained its outlook that the country’s economy would expand between 2.6 percent and 2.7 percent.
To reboot the economy, the liberal president emphasized close cooperation with the private sector including chaebol, he said, suggesting some changes to the liberal government that has been believed to be overly generous to unions and harsh on big companies.
Moon was asked if he felt any burden about his recent meeting with Jay Y. Lee, vice chairman of Samsung Electronics who is still under trial on bribery charges linked to the ousted President Park Geun-hye. “There could be false assumptions that (meeting with Lee) is to overlook the charges, but a trial is a separate matter from business and economy,” stressed Moon.
“The semiconductor industry currently lacks the next-generation growth engine that can help itself to expand beyond the memory business. It is urgent to pursue innovative growth,” said Moon, stressing the government’s focus to foster the growth of system semiconductor, bio-health and futuristic mobility technologies as part of its efforts to enhance the country’s manufacturing prowess.
Moon’s interview took place on Thursday just four hours after North Korea fired rockets in less than a week after it test-launched projectiles. Seoul and Washington believed the latest projectiles to be "short-range missiles," which could make Moon’s endeavor to resume dialogue more difficult.
“It is premature to conclude if North Korea violated U.N Security Council resolutions of prohibiting it from using ballistic missile technology,” said Moon. “But I’d like to warn North Korea that if such behavior is repeated, it could make dialogue and negotiation conditions difficult,” he said.
By Park Yong-beom and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]