“Keeping jobs is a key task in overcoming the national crisis.”

President Moon Jae-in presides over an emergency economic meeting on 22 March. Ch’ongwadae Photo Press Corps

President Moon Jae-in presided over an emergency economic meeting on 22 February, describing the current economic situation as “national difficulties.” It is the employment indicator that has raised President Moon’s sense of crisis. Last month, the number of people employed was 195,000, down from a year earlier. This is the largest fall since May 2009 (-240,000) during the financial crisis. In the aftermath of the new coronavirus infection (Corona 19), if major industries such as aviation and shipbuilding collapse, it is difficult to catch up. President Moon stressed that “period industries that have a profound impact on our economy and employment are being greatly threatened.” This is why the government has also issued an emergency prescription for large corporations that have delayed support.

Graphic by Kim Kyung-jin, reporter capkim@joongang.co.kr

Keeping your job… Large corporations also support ‘conditional’

The government will create a period of 40 trillion won through the Industrial Bank. To support seven long-term industries, such as air and shipping, shipbuilding, automobiles, general machinery, and power communications. Unlike previous measures, large corporations are mainly beneficiaries. Instead, he was conditioned to “maintain employment.” In addition, if the company makes a profit, certain sectors will be shared by the government. When the company’s stock price rises, a portion of the amount of support is given to the government so that the government can share the profits, such as stock-linked securities.

The fund will be funded for a limited time for five years. The law needs to be amended to raise funds. This means that we must cross the threshold of the National Assembly. The government plans to submit an amendment to the San-San Act to the National Assembly by 24 June, and a proposal for a national guarantee for issuance of funds bonds will be presented to the National Assembly through the National Assembly, scheduled for 28 March. At the same time, the government and the Bank of Korea decided to establish a 25 trillion won special purpose organization (SPV) to purchase corporate bonds and corporate notes (CP) with low credit ratings. It is similar to the U.S. Federal Reserve’s support for low-credit companies.

It is an inevitable choice, conscious of the controversy of “spreading blood on large corporations,” but it can be accepted as a new pressure from a corporate perspective. It is also controversial that the refinery industry is missing. A government official said, “We have also reviewed the inclusion of the refinery, but the effect of the employment-inducing effect is relatively low, and we have excluded it.” Yi Sang-ho, head of employment policy at the Korea Institute of Economic Research, said, “The unprecedented crisis is making it difficult for companies to cover their size, and support with the “premise” in such a situation can be a new burden for companies.” “In the current emergency situation, companies must be supported with minimal conditions and without differential sized scales to ensure that the company survives and employment is maintained,” lee said.

Graphic by Young-Hee Kim

Create a job… ‘Korean New Deal’ including 100,000 public alba

The government has also put forth plans to create additional jobs. President Moon named it “The New Deal for The Korean Version.” 550,000 public and youth jobs, which are worth 3.6trillion won, are the starting point. There are 100,000 government jobs available for non-face-to-face digital work. In areas such as public data construction, prevention of multi-use facilities, and administrative support. It is a “public part-time job” aimed at young people who do not even have a job opportunity due to cancellation or postponement of employment.
We also have large-scale projects. Deputy Prime Minister Hong said, “The scale and timing of the soc new deal may be included, including the ‘Digital New Deal’ and the Living Social Overhead Capital (SOC), such as the non-face-to-face service industry, which coincides with the transition to a digital country.”

Graphic by Young-Hee Kim

Although one job is a disappointment at the moment, there are concerns that the “elderly jobs” project will not be re-enacted. The short-term job-oriented employment boom that has poured naratdon is not the root of the Corona19 shock. Kwon Hyuk, a professor at Busan University School of Law, said, “It is time to support the vulnerable and create short-term jobs,” but “we need to look for employment policies that will form the basis for the creation of new jobs in the future through a renewal of the direction of human investment in line with the post-corona.” Professor Emeritus of the School of Economics, Seoul National University, said, “Rather than short-term jobs created by taxes, deregulation should pave the way for the private sector to create new jobs, and improvements in employment and labor policies from a long-term perspective should be followed.”

Corona 19 measures scale 240 trillion won… Obsolete if delayed

Instead of extinguishing the fire in a hurry, the burden of narat debt to carry on the future has increased. Earlier, the government announced a 150 trillion won aid plan at the 1-4 emergency economic meeting. At the fifth meeting, we added nearly 90 trillion won. Deputy Prime Minister Hong said, “If we add 10 trillion won for employment stability special measures, 40 trillion won for the Period Industrial Stability Fund, 35 trillion won for additional financial stability, and 4.4 trillion won in additional loans for small business escrow reinforced using reserves, the total size is 89.4 trillion won.” It is said that the measures for Corona 19 have reached 240 trillion won to date. The government plans to submit a third cardinal of this year to the National Assembly by early June to raise funds. It is only 51 years since 1969 that the government has organized the cardinal proposal three times in a year. Deputy Prime Minister Hong said, “The issuance of deficit bonds is inevitable.”

There are voices saying that fast execution is essential so that full-scale support does not end with a horse feast. Kang Sung-jin, professor of economics at Korea University, said, “Although there are many shortcomings in this measure, first of all, the National Assembly must pass relevant legislation quickly and come up with additional measures to compensate for the shortcomings.”

Deputy Prime Minister Hong Nam and Minister of Planning and Finance are briefed on the contents of the “5th Emergency Economic Measures Meeting” hosted by President Moon Jae-in at the Seoul Government Building in Sejong-ro, Seoul, on 22 March.

The emergency economic meeting, which President Moon regularly presides over once a week, will be replaced by an emergency meeting system in the future. Instead, a system of emergency economic symposiums presided over by Deputy Prime Minister Hong is in operation. The government explained, “Through the five emergency economic meetings held under the presiding presidency, emergency response measures of the nature of emergency relief have been completed and we have transitioned to an economic critical system, which is a permanent crisis management and response system.”

Sejong: Hannam-hyun Reporter ha.namhyun@joongang.co.kr

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