Input 2021.01.26 06:01
The Wen regime to increase the public sector below the OECD average
Sweden’s secret to having a high proportion of the public sector is’flexibility’ and lower wages than the private sector
Experts “Secondary salary system, full-time employment…’unsustainable’ in rigid Korea”
Excessive benefits, such as pensions for public servants, and bills that are difficult to handle for the public
During the presidential election, President Moon Jae-in offered 810,000 jobs in the public sector as a job pledge. The plan was to raise the share of workers in the public sector to the level of 10%, which is half of the average value of the Organization for Economic Cooperation and Development (OECD).
This commitment has met a number of goals. According to statistics on public sector jobs released by the National Statistical Office, the share of public sector workers, including public officials, rose to 9.5% at the end of 2019 after the inauguration of the current government. One in ten is a public sector worker. In two and a half years, 220,000 workers in the public sector increased.
Nevertheless, the job policy that is repeating the employment turmoil is the’Achilles’ case of the Moon Jae-in government’s economic policy. Although jobs in the public sector are increasing, private jobs have plunged due to a speeding increase in the minimum wage. President Moon Jae-in’s pledge to expand jobs in the public sector has been criticized for exacerbating the job problem.
Experts point out that the Moon Jae-in government-style public sector job policy is not sustainable unless the characteristics of Korean-style public sector jobs that do not go out once they come in are not changed. It is pointed out that jobs in the public sector, where the 60-year-old retirement age guarantee, salary system, and pension system are maintained, will be a tax bomb that transfers a huge burden to the people. The public sector has no choice but to become a dinosaur group that eats people’s pockets unless a job salary system suitable for performance and a hiring system that allows entry and exit is introduced. For this reason, experts point out that it is necessary to imitate Sweden’s public sector reform, which accounts for about 30% of the total number of employees and maintains the salary level at the average level of workers.
The reason President Moon Jae-in proposed the pledge of 810,000 jobs in the public sector was that the ratio of workers in the public sector in Korea (7.6% as of 2013) was significantly lower than the national average of the Organization for Economic Cooperation and Development (OECD). They argued that even if the share of jobs in the public sector is adjusted to the average level of the OECD, the job suffering of the people can be relieved.
At the time, President Moon said, “Currently, the ratio of public sector jobs that are responsible for people’s life stability, medical care, education, childcare, welfare, etc. in total employment is 21.3% in OECD countries, compared to only 7.6% in Korea. OECD country average He said, “If we raise the proportion of jobs in the public sector by 3%, we can create 810,000 jobs in the public sector even if it is only half of the OECD average.”
After the presidential election victory, the Moon Jae-in administration announced a’job roadmap’ to expand 810,000 jobs in the public sector. The plan was to hire an additional 174,000 public servants for life and public welfare, such as police and firefighters, to increase social service jobs such as childcare by 340,000, and to hire 300,000 people by direct employment of indirect employees such as public institutions.
The public sector job expansion plan was close to the target. According to statistics on public sector jobs by the National Statistical Office, as of the end of last year, there were 2.62,000 jobs in the public sector, an increase of more than 218,000 since the Moon Jae-in administration was launched. Public sector jobs accounted for up to 9.5% of all employed.
However, after the inauguration of the Moon Jae-in administration, the job turmoil did not end. This is because the number of jobs in the private sector sharply declined as the minimum wage was rapidly increased by 30% between 2018 and 2019. In 2018, when the minimum wage was increased by 16.4%, the increase in the number of employed decreased to 97,000, and then recovered to 300,000 in 2019. In 2019, the number of employees in their 30s and 40s decreased by 50,000 and 160,000.
◇ Controversy over’regularization of non-regular workers’ distorting equality of results
The conversion of non-regular workers without standards into regular workers expanded the controversy over unfairness. In particular, regarding the policy of direct hiring of the Incheon Airport security checkpoint in June of last year (the human government incident), there was also an intense opposition from young people asking, “Is this a fair society of the Moon Jae-in government?”
Initially, IIAC was planning to hire Bohan screening agents as full-time employees of its subsidiaries, but security screening agents came to the head office after President Moon Jae-in visited Incheon International Airport in 2017 and promised, “We will always switch to full-time jobs related to safety and life.” It has been in conflict with the corporation, demanding direct employment as a full-time worker. Afterwards, the construction side unveiled its policy of hiring full-time workers and controversy about’reverse discrimination’ emerged. It was criticized that obtaining high-paid full-time jobs, which are difficult for regular job seekers to obtain, through regularization without the government’s principle, is contrary to the equality of results.
The transition to full-time jobs was delayed due to public opposition and conflicts between stakeholders. Regarding this, it was said that it was a hard reason that President Koo was unable to resolve the issue of converting to regular workers early on.
The government plans to significantly expand jobs in the public sector this year to alleviate the employment shock caused by the novel coronavirus infection (Corona 19). The total recruitment size of public officials and public institutions is expected to be 117,000. Last year alone, 37 trillion won was poured out, and tens of trillion won will be poured out this year to create a financial job. Considering the rigidity of the public sector, there are concerns that once it is picked, it can’t be cut, and it will eventually come back with snowball bills.
◇High-paid Korean public servants in iron bowls VS Swedish public servants who paid less than the private sector
The government puts it on the grounds that the share of public sector employment in Korea is lower than the OECD average. However, this is only a simple comparison without considering Korea’s public sector rigidity and high wages for public servants. Other countries with a high proportion of the public sector are applying a method that minimizes the burden on finance, such as applying the private incentive system to the public sector.
A prime example is Sweden. In Sweden, the share of the public sector in total employment is 28.1%, more than three times that of Korea. However, Sweden’s public sector remuneration and pay system receives different pay depending on the responsibilities and extent of its performance pay system. The wage gap with the private sector is also reasonable.
The average wage for public sector workers in Sweden is 4.45 million won, which is 5.7% lower than the average wage for private sector workers (478 million won).
According to the Taxpayers Federation, in 2018, the standard monthly income for public officials in Korea was 5,220,000 won, 1.8 times higher than the average monthly income of 2.97 million won for all earned workers. Considering the price, the average wage of Korean public servants is twice that of Swedish public servants. When we employ 1.2 million civil servants, we can employ 2.4 million people in Sweden.
The Swedish public sector has employment flexibility similar to that of the private sector. Swedish public sector workers are subject to the same labor laws and regulations as private enterprise workers. In terms of promotion, years of service are not applied, and retirement age is not guaranteed. Like the private sector, lifelong employment does not exist, and employment guarantees depend solely on the individual’s performance and capabilities. This flexibility has created a’sustainable’ system that does not burden the finances even though the proportion of hiring in the public sector is high.
Experts point out that there is a need for a solution to the tax burden that will increase when jobs are increased without changing Korea’s rigid public sector hiring system. It is said that Korea’s rigid public sector job system is not sustainable due to the remaining centralized recruitment process and wage system based on years of service, retirement guarantees, and pensions.
Seok-jin Woo, a professor of economics at Myongji University, said, “We are increasing the size of the public sector. In the past, public servants’ pensions were to compensate for jobs in the public sector because they were paid less than the private sector. While receiving salary, he said, “It was said that public institutions would introduce a job-based pay system. “There will be no choice but to plan a plan such as operating,” he said.