Korea’s minimum wage divides Moon’s top economists

“Kim is an applied economics expert and is well aware of the relations between the rise in minimum wage and the fall in employment, which is why he finally acknowledged its impact,” said Pyo Hak-gil, an economics professor at Seoul National University.

But the Blue House’s top economic official doesn’t agree with the finance minister.

“There was no fall in employment due to the minimum wage increase,” said economist Jang Ha-sung, President Moon’s chief of staff for policy, in a high-level meeting in Seoul on Tuesday. “There has been some controversy about the fall in employment, but based on the analysis by several research institutes using the statistics from March, there was no notable fall in hiring, excluding some food and beverage businesses.”

Jang added that policy support for companies that could suffer from the new minimum wage was received well, and requests for government funding far exceeded initial projections.

The differences in opinion between Kim and Jang, the country’s top two economic policymakers, have market watchers worried about the government’s future economic policy direction.

“The perspectives and diagnosis of current economic conditions diverge within the government, which raises questions about its ability to come up with proper solutions,” said Yun Chang-hyun, a professor of economics at the University of Seoul.

“The unemployment issue is not entirely the fault of the current administration, but it is true that some of its policies intended to expand jobs had the opposite effect,” said Nam Sung-il, professor of economics at Sogang University. “The government has to approach this issue with a more forward-looking perspective.”