President Moon announces “J-nomics,” a new paradigm for job-led growth

Posted on : 2017-06-13 17:29 KST Modified on : 2019-10-19 20:29 KST
Strategy is a departure from his predecessors’ emphasis on trickle-down, company-centered growth
President Moon Jae-in makes a speech to the National Assembly on June 12
President Moon Jae-in makes a speech to the National Assembly on June 12

The speech that President Moon Jae-in made to the National Assembly on June 12 was imbued with the basic components of “J-nomics,” the signature economic agenda that Moon has espoused since his campaign for president. In a nutshell, this plan treats jobs not as the result of growth but rather as the requirement for growth and seeks to use job creation as the dynamo for growth.

Moon’s ideas are clearly expressed in the following remarks: “We have to shut down the cycle of growth without employment. We need an economic paradigm shift from the idea that jobs are created as the result of growth to the idea that growth occurs when jobs increase.” This economic philosophy is clearly set apart from the “trickle-down effect” embraced by previous presidents Lee Myung-bak (2008-13) and Park Geun-hye (2013-16), who argued that companies must grow for jobs to be created. Moon thus replaces the company-centered growth model with the formula of a virtuous cycle. Under the former, easing regulations on companies spurs them to invest more, which creates jobs and thus increases household income. Under the latter, more jobs are created, which increases household income and spurs consumption, increasing company earnings and leading companies to boost investment and ultimately create even more jobs. This can be succinctly summarized as “job-led growth.” This is also distinguished from the welfare-led (or redistribution-led) growth that is advocated by certain parts of the progressive movement. Moon‘s allies also explain this as the next evolution of the “income-led growth” that Moon pledged during his 2012 presidential bid.

Another noteworthy point is that Moon emphasized that the public sector should play a leading role in creating jobs. This is also confirmed in Moon’s remark that “A fundamental job policy is a national challenge that requires the support both of the private sector and the government, but in order to get quick results, the public sector needs to make the first move.” Since the government does not have any way to immediately compel the private sector to increase investment and employment, it has no choice but to “prime the pump” by increasing jobs in the public sector and then to wait for the private sector to join in.

Attention is also focusing on how Moon preemptively expounded an argument countering the “big government” narrative of conservatives who are critical of expanding the public sector. “What the people need is not ‘small government,’ but rather a government that does what the people need,” Moon said. What is important to people who are pushed to the very brink of survival, in other words, is not the size of government, but rather its responsibility and capability.

By Lee Se-young, staff reporter

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