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Speaking at a New Year's Press Conference: President Moon Said, "Ultimately, Resolving The Issue of N. Korean Sanctions Is Dependent On the Speed of Denuclearization"
President Moon Jae-in announced the policy direction of his administration on employment, labor issues and regulatory innovation in a Q&A session that was part of his New Year's news conference at Cheong Wa Dae, on Jan. 10, 2019. Reflecting on his first 20 months in office, the chief executive said the lackluster employment index was the biggest regret of his term, saying, "How to solve the issue is the most pressing task of my administration." He said the chronically poor performance of manufacturing resulted in the sluggish employment market. Proposing innovation as the key to solving the issue, he said, "Innovation in the manufacturing sector such as applying smart technologies will heighten the industry's competitiveness." President Moon added that the government will strive to support venture startups and entrepreneurs to produce new growth momentum. On labor policy, he said, "Improving the lives of employees is crucial for reducing and removing economic inequality." "My administration has put a lot of effort toward raising employee wages, shortening work hours and transforming irregular workers into regular ones."
The national address was soon followed by a question-and-answer session, attended by some 200 journalists at the presidential office at Cheong Wa Dae. Moon's remarks come amid growing concerns that the country's economy may be slowing, partly due to increased costs and job reductions that may have been caused by the very tactic Moon intro-duced at the start of his presidency in May 2017.
Speaking at a New Year's press con-ference on Jan. 10, 2019, President Moon Jae-in ruled out the possibility of North Korea's denuclearization and a potential peace treaty being linked to the U.S. military presence in South Korea, Japan and the Pacific.
"To put it simply, Chairman Kim Jong-un's trip to China is a sign that the second North Korea-U.S. summit is near," Moon said. On January 7, Kim made his fourth trip to China, where he met with Chinese President Xi Jinping and inspected industrial facilities.
The United States and the North Korea are reportedly working on hammering out the schedule and location of their second summit. "Kim's visit to Seoul will be the first by a North Korean leader, so in itself it will be a very important, major turning point in inter-Korean relations," said Moon. He added that he was certain that the trip will be made, as the North Korean leader personally made the promise.
Kim agreed to visit Seoul during the third Inter-Korean Summit held in Pyongyang in September. Although Moon at the time said that the visit would be in 2018, Kim's visit did not materialize, for which the North Korean leader expressed regret in a letter to Moon. "However, as it is linked to the second North Korea-U.S. Summit, I think that Kim Jong-un's visit would be more smoothly arranged after the second North Korea-U.S. Summit."
Moon added that matters related to establishing peace and declaring the end of the Korean War can be considered as measures corresponding to Pyongyang's denuclearization steps, and that he hopes the differences in Pyongyang and Washington's views on the issues will be resolved through the second Trump-Kim meeting.
Moon, however, made it clear that North Korea taking denuclearization steps is the key to resolving the matter. "Ultimately, resolving the issue of North Korean sanctions is dependent on the speed of denuclearization, so North Korea needs to take bolder practical denuclearization steps," Moon said regarding the deadlock in US-North Korea negotiations.
In response to a question regarding Kim's idea of denuclearization, Moon stressed that the North Korean leader's view is no different from that of the international community. "Kim has made it clear to me, President Trump, President Xi Jinping and President Vladimir Putin that (his idea of denuclearization has) no differences with the complete denu-clearization the international community demands," said Moon.
Moon added that while he is aware of concerns that Kim might make demands regarding the U.S. military presence, Kim has made it clear that denuclearization and declaring the end of the war are unrelated to U.S. Forces Korea.
"U.S. Forces Korea is not linked to denuclearization, (the U.S. military) is in Korea as part of the South Korea-U.S. alliance, therefore the matter of whether U.S. Forces Korea will be maintained or not is entirely up to South Korea and the United States," said Moon.
President Moon sought to defend his embattled income-led growth strategy, vowing efforts to make "tangible" benefits this year. While addressing the nation before his first press conference in the New Year, the President said the government too is well-aware of difficulties facing Asia's fourth-largest economy but that is only the more reason the country should continue to push for income-led growth.
"An economic policy shift can be truly frightening. It will take time and may generate controversy," said the President in his nationally broadcast speech. "However, it is the path that we must take. We will achieve the goal of an innovative, inclusive nation by all means while sufficiently making up for any shortcomings," he said.
The income-led growth, along with people-oriented growth, seeks to boost the economy by increasing the average income of households and thus their spending. Under such a notion, the government-led tripartite commission on the minimum wage has hiked the minimum hourly pay rate by nearly 30% from KR\6,470 in 2017 to KR\8,350 this year (US$5.78-$7.46).
The President insisted the problem of fair distribution was not unique to the country and that the rest of the globe was moving in a similar direction to address the issue. "Economic inequality, also dubbed the 1% versus 99% society or a winner-take-all economy, is not a problem unique to us. It is a common challenge facing the entire world," he said.
"The people-centered economy and innovative, inclusive nation being pursued by my administration are precisely in line with such thinking. Our goal is to create an economy in which all prosper together on the basis of a fair economy with a level playing field, where innovative and income-driven growth enable sustainable development," Moon added.
The President acknowledged some shortcomings in the process, especially in creating new jobs. The finance ministry reported the country's jobless rate stood at 3.8% in 2018, the highest since 2001, while the number of people employed grew only by 97,000 from a year earlier, the lowest on-year gain since 2009.
"My administration is taking this economic situation very seriously. However, I want to emphasize that the hardships we are suffering now are even stronger proof of the need for the people-centered economy," said the President.
The government needs to strength-en an economic safety net for those impoverished. More impor-tant than that in the long term is to take measures to increase employment in the non-farming, private sector, especially manufacturing industries.
To expand employment, new industries must be developed, while existing industries must recover vitality. The Moon administration has been failing in both domains. It tried to create jobs in the private sector by creating ones in the public sector and to propel growth by increasing income -- the minimum wage for that matter.
The minimum wage was raised sharply twice to benefit low-income workers, but ironically, many of them simply lost their jobs. The reason was simple: Small businesses could not afford increased labor costs. Policymakers were shortsighted.
President Moon vowed to take com-plementary measures related to mini-mum wage hikes. However, the Ministry of Employment and Labor appears to be moving to make the minimum wage more burdensome for employers. The ministry plans to revise an enforcement ordinance of the Minimum Wage Act to recognize as working hours in the calculation of the minimum wage.
In Korea, the minimum wage is determined at an hourly rate. Therefore, if working hours increase, so will the wage an employer must pay. To check if an employer is paying the legal minimum wage, the monthly wage is divided by the number of working hours for the actual paid hourly wage to be compared with the minimum wage.★