By Jenna Gibson
For the first time in years, young South Koreans are optimistic about their country’s economy – even though major economic issues have not gone away. In a new poll from Deloitte that asked regularly employed South Koreans born between 1983 and 1994 what they thought of their country’s economic outlook for this year, 48 percent responded positively. This is a huge jump from the same poll last year, when only 13 percent held positive views of Korea’s growth potential.
The economic outlook for young Koreans has been grim for the past few years, with youth unemployment continuing to climb. Under a new expanded definition that includes certain types of underemployment, Korea’s youth unemployment rate reached a staggering 24 percent. At the same time, South Korea’s overall economic growth is steady at around 3 percent, a rate that is expected to be maintained or increase slightly in 2018.
Despite this, young South Koreans are bullish on Korea’s growth in 2018. One of the main reasons is President Moon Jae-in, who was swept into office on a wave of populism bolstered by the grassroots democratic movement that removed President Park Geun-hye from office. And the juxtaposition between Park and Moon could not be more stark – she represented everything many young Koreans see as wrong with what they call Hell Chosun, from her reliance on old money and entrenched networks of the ultra-rich to her distant and aloof manner. Moon on the other hand makes connecting with the people a priority, from eating in the cafeteria to taking actual questions from journalists during a marathon press conference.
In terms of his economic goals, President Moon laid out his goals in a recent statement, saying, “We still have a long way to go…there seems to be little change in the everyday lives of the people…When I finish my term, I hope to hear people saying, ‘Much has changed, my life has become better.’”
But while President Moon and his policies overall are incredibly popular, his economic scorecard is more mixed. Recent Gallup Korea polling shows that while approval of Moon’s diplomatic and North Korea policies are at 74 and 83 percent respectively, only 47 percent of South Koreans approve of the way he’s handling the economy. This could be because while Moon has laid out a slew of ambitious policies, from cracking down on conglomerates to reducing the maximum number of hours workers can clock in per week, many of these plans will take years to show dividends, and some may cause unintended consequences in the meantime.
Take one of Moon’s major economic initiatives, a minimum wage hike, for example. His administration increased the country’s minimum wage from 6,470 won per hour in 2017 to 7,530 in 2018, aiming to reach 10,000 by 2020. But while this addresses some of the Korean public’s major concerns about growing income inequality, some fear it will also put a damper on hiring. In fact, statistics show there are already job losses, particularly among small and medium-sized businesses.
In addition, one of the major limitations of the Deloitte survey is that it only polls young South Koreans who are regularly employed. As researchers have pointed out, one of the main issues holding young Koreans (especially women and those from economically disadvantaged backgrounds) back is the dichotomy between those with regular work and those who are stuck in a cycle of temporary and contract positions. So while this study is certainly instructive in terms of highlighting the huge jump in those who have a positive outlook of the South Korean economy, it would be interesting to see if young South Koreans who are un- or under-employed share the same optimism.
Moon seems to really get the issues that plague young Koreans – or at least he tries to. His policies may not be the silver bullet that launches a new wave of economic growth, but for the first time in years, Koreans feel like they have a president who is at least listening to their issues and trying to find a way to fix them.
Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.
Photo from LG전자’s photostream on flickr Creative Commons.