(LEAD) Seoul to take all necessary steps to create more jobs

All News 16:33 October 08, 2018

(ATTN: ADDS details in last 6 paras)

SEJONG, Oct. 8 (Yonhap) -- The government will take all necessary steps to improve the country's dismal job market as employment conditions in September are widely expected to remain disappointing, the finance ministry said Monday.

During a policy review meeting in Seoul, Finance Minister Kim Dong-yeon and other economy-related ministers shared the view that each ministry must seek to mobilize all possible options to help out with employment.

Earlier this month, the finance minister said that he does not rule out the possibility of a contraction in job numbers for last month, expressing concerns that employment remains in the doldrums due to ongoing corporate restructuring moves and various policy uncertainties.

The number of employed people reached 26.9 million in August, up a meager 3,000 from the same month in 2017.

The increase in jobs last month was the smallest since January 2010, when 10,000 jobs were lost, according to Statistics Korea.

There has been criticism that the Moon Jae-in government's signature economic policies, such as a hike in the minimum wage, are part of the reason for the poor job market and widening income inequality.

Earlier, a state panel decided to raise the country's minimum wage for next year by 10.9 percent to 8,350 won (US$7.44) per hour, following a 16.4 percent hike this year.

The participants also shared the view that the country's exports and domestic demand remain sound, but corporate spending and construction investment remain sluggish.

They also agreed to make concerted efforts to accelerate the implementation of innovation-led economic policies and seek more deregulation as well.

In a separate meeting with the finance ministry's senior-level officials, the policymaker said the government should continue monitoring the country's housing price trends, and iron out additional measures to stabilize home prices.

Last month, South Korea's government said it would levy higher taxes than originally planned as it strives to rein in soaring property prices.

Over the past year, the Moon Jae-in government has unveiled a series of measures to curb housing prices that have had little impact on the market.

Alarmed by the fastest housing price increases in a decade, Seoul said it would further raise the tax burden on owners of high-priced houses and multiple homes and seek to raise the taxable rate of a property, which is now 80 percent of the government-set value. The rate should climb to 100 percent by 2022, compared with the originally proposed 90 percent by 2020.

Despite a series of measures to rein in soaring prices, apartment prices in the affluent Gangnam district and some other neighborhoods have jumped on hopes of reconstruction projects moving forward and ample liquidity circulating in the economy.

The Bank of Korea's eight rounds of rate cuts since 2012 have helped send home prices and household debt to record levels as more people take out loans to buy homes.