Pres. Moon's visit to SK Hynix new memory plant

President Moon Jae-in attended a ceremony marking the construction of new assembly lines of SK Hynix in Cheongju, North Chungcheong Province on Thursday. He said that it is eventually companies that increase quality jobs. His remark is quite different from his criticism over government officials at the meeting to check the status of jobs for youth held in January this year, when he said, “It is a stereotype that jobs are created by the private sector.” With respect to the previous job policy, President Moon also said that he “was not successful in increasing the quantity of jobs.” This is different from his position at the end of May when he emphasized the “appropriateness of 'income-led-growth,' which was one of the job policies, saying that the positive effect of increasing minimum wage is 90 percent."

SK Hynix's new Nand memory plant is expected to generate more than 210,000 jobs by investing 20 trillion won, which is conspicuously more than last year’s business profit of 14 trillion won and will create 70.9 trillion won of production inducement effect. The Moon Jae-in administration, unfortunately, which promised to make public jobs led by the government, pouring more than 54 trillion won of tax payers’ money, was only able to increase 3,000 jobs in August. Things were even worse in September as the number of employed started to decrease, indicating that the government is likely to witness the worst employment. It has become a situation where the president himself had no choice but to admit responsibility over the employment shock.

At the 8th Job Committee on the same day, Moon suggested a plan to generate 107,000 jobs by investing 1.7726 trillion won in five new industries including future cars, semi-conductors and display. It is very appropriate and ensuring that he showed signs of changes in the government's policy basis as it emphasized its role as the "supporter tower" to provide tailored support to businesses.

We need to keep an eye on whether such changes in economic policies will actually be visualized. President Moon used to visit plants of companies to encourage chaebols. Ministries and government agencies, however, immediately bashed chaebols if it were a competition under the name of "eradicating deep-rooted evils" by having the Fair Trade Commission or the prosecution seize and search the concerned companies. Moreover, the government implemented various legislations to oppress corporations, such as the amendment of the Fair Trade Act and the Commerce Act, by regarding businesses as potential criminals.

We cannot anticipate having businesses to expand their investment and create quality jobs just because the president made some remarks that encouraged them. President Moon needs to support businesses by substantially alleviating regulations and labor revolution along with building a corporation-friendly environment despite opposition by his political supporters. By doing so, corporations such SK Hynix can raise investment and employment will increase.