This blog post examines corporate decisions to reduce hiring and restructure amid the employment freeze from the perspectives of government and households, exploring how to interpret employment issues while highlighting their significance and limitations.
Employment and job creation, directly tied to livelihoods and thus more critical
The economy operates through the interplay of three key players, so these entities constantly appear in economic news and articles. How, then, are these three players portrayed in articles? Even when covering the same topic, the narrative style varies depending on the perspective. The government typically appears when policy-related discussions arise. Articles written from the government agency’s standpoint generally highlight the policy’s advantages, aligning with the goal of policy promotion. Conversely, perspectives raising issues with policies often focus on their shortcomings.
The entity appearing most frequently in articles is corporations. Most articles covering exports, new technologies, or trade achievements are directly linked to corporations. In articles by media outlets with poor relations with the government, corporations claiming harm from government policies are mentioned more often than those receiving government support. Conversely, media outlets with relatively harmonious relations with the government publish articles that contrast with this. From this perspective, it can be said that the government and the media are generally in a tense relationship, and the reason why there are not many articles that unilaterally praise the government can also be found here.
Households generally appear as victims. This tendency becomes more pronounced, especially when the economic situation is poor. When articles aim to criticize the government or corporations, households—represented by citizens, common people, self-employed individuals, and salaried workers—are frequently portrayed as groups suffering disadvantages despite their hard work.
Ultimately, which of the three perspectives to adopt depends on the reader’s judgment. One must read the article dispassionately based on their own position and circumstances, decide which side to support—in other words, determine the direction of their political choice. Furthermore, one must also consider how to set the direction for economic activities like investment, that is, make economic choices.
The Job Problem Everyone is Watching
Earning money is extremely important. The national economy runs smoothly only when households engage in consumption activities based on their income. Companies generate sales targeting households that consume, thereby earning profits. The government operates similarly. It relies on tax revenues from households with income and companies with profits to fund national operations. For these reasons, the ‘job’ issue inevitably becomes a highly sensitive matter for all three entities.
“Jobs Most Urgent… Economic Polarization Serious” (No Cut News, Dec. 19, 2022)
According to the “2022 Survey on Koreans’ Awareness and Values” conducted by the Ministry of Culture, Sports and Tourism, South Korean citizens identified ‘jobs (29.0%)’ as the most pressing issue society must resolve. This was followed by ‘income inequality (20.0%)’, ‘real estate/housing (18.8%)’, and ‘low birth rate/aging population (17.4%)’. These results confirm that among the three key economic actors, households prioritize solving ‘livelihood issues’ above all else, showing the greatest concern for jobs that provide ‘income’. This reflects a very fundamental demand: that earning potential must come first, even if income levels vary and home ownership remains out of reach.
“Historic Hiring Freeze Approaches… Companies Cut Recruitment and Accept Voluntary Retirement” (Yonhap News, Dec. 20, 2022)
As 2022, a difficult year, passed and 2023, expected to bring an economic downturn, approached, corporate perspectives diverged from household aspirations. The headline above addresses the growing phenomenon of companies reducing hiring scales and soliciting voluntary retirement offers from existing employees to ensure survival and profit.
While this is deeply disappointing and regrettable for job seekers preparing for employment and workers facing retirement pressure, from a corporate perspective, it constitutes an efficient choice as long as it remains legal. It may seem harsh, but companies bear no legal obligation to guarantee citizens’ stable livelihoods at the cost of incurring losses. That is fundamentally the government’s role, and simultaneously an area where each company’s management philosophy comes into play.
“Employment Insurance Loses 2.5 Billion Won… Received Unemployment Benefits While Getting Salary” (Money Today, December 14, 2022)
Let’s look at another article. Employment insurance is a social security system that provides unemployment benefits to ensure the livelihood stability of unemployed workers and supports them in finding new jobs. Alongside the National Pension, Health Insurance, and Industrial Accident Compensation Insurance, it is one of the so-called ‘Four Major Insurances’. This clearly falls within the government’s domain. The article in question covers cases where individuals with earned income fraudulently received unemployment benefits, with the total amount reaching 25 billion won. Unlike companies, the government does not prioritize profit as its primary goal. Instead, the government has a responsibility to collect taxes fairly and use them reasonably. Creating a society where unemployment benefits are unnecessary—in other words, increasing the employment rate—is the more fundamental solution. To this end, the government implements various employment support policies in addition to the employment insurance system. Direct methods include expanding the number of public officials or promoting public projects, while indirect methods include providing tax breaks or subsidies to companies that increase employment.
South Korea’s Job Situation
“Large and Small Businesses Show Job Polarization…Small Business Owners Have No Room for Hiring” (News1, December 13, 2022)
The job situation also varies significantly with economic booms and busts. Key indicators frequently used in economic articles related to employment issues are the unemployment rate and the employment rate. The unemployment rate refers to the percentage of people who are willing and able to work but remain unemployed while actively seeking employment. The employment rate indicates the proportion of employed individuals among the population aged 15 and older. Examining both indicators together provides a more accurate understanding of the overall job situation. Generally, when the unemployment rate decreases, the employment rate increases, as job seekers successfully find employment. However, exceptions exist. If more people give up looking for work, both the unemployment rate and employment rate can decrease simultaneously, requiring a more comprehensive interpretation.
The cited article succinctly illustrates this job market situation. While many job seekers express a desire to work, companies themselves complain about difficulties, stating they “can’t find people to hire.” It might seem like the problem could be solved simply by matching job seekers with available positions, but reality is not so straightforward. Interpretations of the reasons vary depending on one’s perspective. The primary reason cited for job seekers avoiding small and medium-sized enterprises (SMEs) is the “wage gap.” No matter how hard they work, the wage gap with large corporations widens over time, leading them to prefer large companies even if it means delaying their entry into the workforce. The difficulty small business owners, such as convenience stores or restaurants, face in finding staff stems from the same issue. These businesses often cannot offer wages above the minimum wage or are perceived as so-called ‘3D industries’ (dirty, dangerous, and difficult), making them unattractive to job seekers. From the job seeker’s perspective, they feel they are not receiving fair compensation for their labor, leading them to reject such jobs. Conversely, companies claim they lack the financial capacity to pay such wages, and small business owners often state they simply cannot afford to hire staff at all. In other words, it’s a situation where “they want to pay but have no money to do so,” and this cycle repeats.
This article concludes by emphasizing the need for the government to play an active role in mitigating wage polarization through various subsidy programs and labor market flexibility to address these issues. It also touches on another sensitive matter: relaxing restrictions on hiring foreign workers. The sharply conflicting interests of individuals striving to make ends meet from different positions naturally lead to issues like minimum wage, working hours, foreign workers, and strikes.
Let’s summarize. The government bears the responsibility to expand employment and stabilize households. Households seek stable income, and the aspirations of those preparing for employment are particularly strong. Corporate positions vary with circumstances. If investing in labor can increase profits, companies will seek to hire more; if labor costs become burdensome, they will seek to reduce employment. When encountering articles addressing such socially divisive issues, it is necessary to reassess one’s own position. The same article can be interpreted entirely differently depending on whether one is a direct participant in employment and hiring, a third party, or an investor. Recognizing these differences is where a mature approach to reading economic articles begins.
