Tag Archive | "welfare"

Government Bets on People’s Sense of Civic Duty

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

  • Lawmakers are debating the scope of the proposed funds for relief from the COVID-19 crisis.
  • The ruling Democratic Party (DP) argued for extending support to all households. But the administration and the opposition party opposed this proposal, citing strains on the state’s fiscal health.
  • To persuade the administration, DP lawmakers proposed “voluntary contribution of the payouts by high-income earners” as a means to reduce the cost burdens of the disaster relief fund.
  • On April 22, Prime Minister Chung Sye-kyun announced that the administration would accept DP’s proposal if the National Assembly reaches an agreement and comes up with a plan to make voluntary contributions of payouts possible.

Implications: The government’s belief that high-income earners would return their share of the emergency relief fund reveals policymakers’ trust in the Korean public’s sense of civic duty. Critics have pointed out that relying on volunteerism is not sound policy-making. However, DP lawmakers are confident that people will contribute their share if civic leaders and influencers set an example. In addition, there are tax incentives for those who take this action. DP lawmakers also point to ongoing public campaigns to raise money for the emergency relief fund as evidence of the people’s volunteerism.

Context: South Korea’s past experiences validate the government’s belief that people would make significant sacrifices. When the country’s economy ran out of foreign reserve currency during the 1997 Asian Financial Crisis, South Koreans launched a national gold-collecting campaign. In the first quarter of 1998, 2.43 million people participated in this campaign and collected 1.65 tons of gold which resulted in earning USD 2.2 billion worth of foreign currency to pay back the International Monetary Fund.

Korea View was edited by Yong Kwon with the help of Gordon Henning, Soojin Hwang, Hyungim Jang, and Ingyeong Park.

Picture depicting the 1998 gold collection movement from user ClubCapetown on flickr

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The Sharing Economy and Korea’s Fragile Social Safety Net

By Yea Ji Nam

In December 2018, close to a hundred thousand taxi drivers took to the streets around the National Assembly to protest against the launch of a mobile ride-sharing service from Kakao Mobility. Amid these rolling protests, two elderly taxi drivers set themselves on fire to bring attention to the challenges facing Korea’s taxi drivers.

While some might be tempted to castigate the taxi drivers as Luddites, bitter protests against the introduction of Kakao’s carpooling service reflect their persistently precarious livelihood and weaknesses in Korea’s welfare system.

When Kakao Mobility announced the launch of carpooling service on October 16, 2018, the company used language that focused on respecting taxi drivers. The company’s statement clarified that Kakao did not intend to undermine the local taxi industry and reiterated their commitment to operating only during specified commuting hours. The company also highlighted the broader social benefits of the service, promising to relieve rush hour traffic snarls.

Despite these seemingly reasonable concessions, taxi drivers opposed the launch of the carpooling service. One immediate issue was the disagreement around the meaning of commuting hours. Kakao did not specify what it meant by “commuting hours,” leaving open the potential for the ride-sharing app to operate at all times.

More fundamentally, the taxi drivers were expressing their frustration at the insecurity facing older workers in the service industry and the perceived indifference of the government to their anxieties. In addition to their low income, 54% of taxi drivers in Korea are over 60 and would face immense difficulties finding new employment. With both the welfare system and the country’s industrial policies threatening their ability to live with dignity, taxi drivers turned their anger on not only Kakao but also the Moon’s administration.

As a result of a strong backlash, Kakao Mobility backed off a little and temporarily postponed the official launch of its carpooling service. However, the Moon’s administration did not take a clear position on the taxi union’s demands for improved protection and a more robust social safety net.

To resolve this dispute, several cases from other countries can serve as a benchmark for establishing a better welfare policy for the elderly.

First, Korean taxi drivers are mad at working long hours for low pay. In the Netherlands, however, drivers earn more than the country’s average salary and they are highly respected. Social awareness of drivers in the Netherlands impacts both their income and society’s approach to issues affecting this workforce, including aging.

Second, 54 percent of Korean taxi drivers are over the age of 60 and face challenges finding a new job. Norway is a country with one of the largest elderly communities in the world (by share of the total population). The government proactively provides job opportunities to workers over the age of 65 and provides generous welfare to the elderly.

These are some policies that the Moon’s administration could consider to address the underlying anxieties of taxi drivers and soften the pushback against innovative companies like Kakao. Perhaps more importantly, the government should do more to demonstrate their concern for taxi workers – and let them know that they have not been forgotten.

Yea Ji Nam is currently an Intern at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from the Republic of Korea’s photostream on flickr Creative Commons.

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