Pukyong National University

The rediscovery of the value of 'income-led growth' through COVID-19 crisis
The Hankyoreh, a full interview with Prof. Hong Jang-pyo of PKNU, the Master planner of 'income-led growth'

△ The article page of Professor Hong Jang-pyo's interview in the Hankyoreh. ⓒPhoto by Lee Sung-jae (PR Team)

The protagonist who appeared in the full interview on page 24 of the Hankyoreh newspaper of May,20 was Professor Hong Jang-pyo of Economics at Pukyong National University, who is serving as chairperson of the Special Committee on income-led growth.

It was a page titled <Direct Interview of Editorial Writer Kwak Jeong-soo>. The article in this interview selected Professor Hong's remark as the main title, 'The rediscovery of the value of 'income-led growth' through COVID-19 crisis'.
 
Hankyoreh said in this article, "He is called as 'the master planner of 'So-ju-seong'. He served as the first government chief of the Blue House, and in September 2018, served as the special committee chair. The chairperson has no fixed salary, that means he is actually a volunteer. He works for a special committee during the week and he goes to Busan every Friday and lectures at Pukyong National University and has been on the weekend couple for almost two years.". 'So-ju-seong' is an abbreviation of Korean word 'Soduek-Judo-Seongjang' which means 'income-led growth'

In 2017, Professor Hong, who served as the first economic chief of the Moon Jae-in government, graduated from the Department of Economics at Seoul National University and received a master's and doctorate in economics from the Graduate School. His specialty is industrial economics. In 1991, he was appointed professor of Economics at Pukyong National University, where he had served as dean of the College of Humanities and Social Sciences and president of the Korea Economic Association.

He is the theoretical advocate of 'income-led growth', the core of J-nomics (the president Moon Jae-in's government economic policy). The point is that as real wages increase, consumption and investment increase, and labor productivity increases, leading to a virtuous cycle that leads to economic growth. The government's emergency disaster aid is in the same vein.

Professor Hong commented in the Hankyoreh interview on this day about ▷ roadmap to the national employment insurance era, ▷ employment insurance application plan for self-employed people, ▷ financial burden due to expansion of employment insurance, ▷ relationship between corona measures and income-led growth, ▷ To Suzhou for the past three years Comments on the evaluation of Korea.
In an interview at the Hankyoreh, Professor Hong commented on ▷the roadmap to the national employment insurance era, ▷plans to apply self-employed employment insurance, ▷the financial burden of expanding employment insurance, ▷the relationship between corona measures and income-led growth, and income-led growth over the past three years and also he expressed his opinion on the evaluation of growth and so on.

How is the value of 'Income-led growth' evaluated in the corona crisis?

Hankyoreh said in the interview on the day, "Strengthening the employment safety net, such as expanding employment insurance, is the core of income-led growth.", and added, "In the process of overcoming the corona crisis, the meaning of income-led growth seems to be re-examined."

In this regard, Professor Hong said, "It was an opportunity for to rediscover the true value of income-led growth through COVID-19. The COVID-19 shock makes it difficult for all people, but young people, temporary and daily workers, and small business owners will suffer more. Whenever the crisis recurs in the future, the damage of the vulnerable rate will increase more and more. The emphasis on income-led growth is that we need a strong social safety net to go to a new 'innovative society'. During the currency crisis, over 1 million people experienced mass unemployment due to the massive dismissals. As human capital was damaged, the Korean economy was also hit hard. In addition, the labor-management relations were changed to hostile and confrontational relations. "We must not repeat the same mistake again."

"The conservative press claims that income-led growth has failed, causing disaster in distribution and employment." Professor Hong answered to the question. "No, it is not true. Rather than that, distribution has improved significantly. In addition, there is no evidence of an employment tragedy. In the meantime, there were many misunderstandings due to incomplete and fragmentary data."

Regarding the task of income-led growth over the remaining 2 years of the Moon Jae-in administration, Professor Hong said, "Maintaining employment and creating jobs to overcome the economic crisis is a top priority.", he added "After the government's countermeasures against damages, we need to reform the system to create jobs, expand public investment to restore domestic demand, and strengthen the employment safety net."

'Income-led growth emphasizes the active financial role. The conservative press is concerned that the financial health will deteriorate as a result of corona measures”, professor Hong answered to the question. "It is a dangerous idea not to spend the money necessary to overcome the national crisis for financial soundness. After the corona, governments in major countries are pouring money, regardless of their conservative and progressive tendencies." <Pukyong Today>