The Korea Employers Federation on Thursday strongly criticized the new government’s policy to eliminate irregular working positions, contending it would further divide the gap between small and large firms.

KEF Vice Chairman Kim Young-bae expressed his concerns regarding the Moon Jae-in administration’s pledge to regularize irregular workers at public firms, saying it has negative impacts on job creation and small businesses, during a forum in Seoul on Thursday. 

Less than a month in office, the newly-elected President Moon Jae-in has made a strong push to deal with the country’s soaring unemployment rate. As part of his administration’s labor policy proposals, Moon has vowed to create 810,000 new jobs in the public sector, reduce the number of irregular public workers to zero and increase the minimum wage from 6,470 won ($5.79) to 10,000 won within his five-year term.

However according to Kim, the government’s new policy of ridding irregular jobs would create a higher demand for workers to leave small and medium-sized companies for large corporations’ full-time position. He also pointed out that outsourcing work is a global norm and depicting all outsourced workforce in a negative light would only hurt the small firms.

“Although our society needs to eliminate unreasonable discrimination and protect working conditions, it is unreasonable to say irregular workers cannot be hired without considering due circumstances of both companies and workers,“ he says, adding the government should look at the matter as an issue among large, medium and small enterprises, not between regular or irregular workers.

According to Kim, Korea’s labor market is mostly composed of large corporations with 73 percent of the labor union members belonging to more than 1,000 enterprises, stating that lowering the demand for SMEs will ultimately lead to a widening wage gap.

Meanwhile on Thursday, Moon‘s secretary for general affairs said the president is slashing funds for special presidential activities in order to further support the administration’s job creation mandates, adding that Moon said he would pay for family meals and other expenses out of his own pocket.

The move comes a day after the Finance Ministry said the government would release a road map by the end of June on how to create more jobs in the public sector, alluding to a 10 trillion won ($8.89 billion) supplementary budget that was initially proposed by Moon during his campaign trail.

The recently launched State Affairs Planning Advisory Committee, the president’s de facto transition team, announced that economic growth and tackling Korea’s unemployment rate will be one of the government’s top priorities.

Korea’s unemployment rate last month reached 4.2 percent, up 0.3 percentage point from the same month last year. With roughly 1.17 million people jobless, the figure represents the largest number of unemployed individuals for the month of April.

By Julie Jackson (juliejackson@heraldcorp.com)