Policy Comparison of Presidential Candidates

Ahead of the December presidential elections, the presidential candidates focus more on economic democracy, labor, and welfare than on economic growth.

The Saenuri Party presidential candidate, Park Geun-hye, was the first among the candidates to announce her pledges on economic growth. However, among her 10 core pledges is an emphasis on reducing discrimination against non-regular workers through economic democracy and ‘employment without discrimination’.

The Democratic United Party presidential candidate, Moon Jae-in, is focusing on labor, welfare, and economic democracy issues, as he is chairman of the ‘Committee for Jobs’ in his election camp. He even has announced his welfare policy twice, making it more in detail.

1. Economic Policies

The candidates are working to win middle and working class votes through promises of ‘economic democracy’, and give the impression that they have clear agendas. There are differences between the candidates’ definitions of economic democracy and the methods required to make that reality. Ms. Park defines economic democracy as an institutional tool where restrictions exist for conglomerates to enable all economic entities to live in harmony. Mr. Moon desires to ‘reform the conglomerates’ by reducing discrimination against non-regular workers, guarantee Fundamental Principles and Rights at Work, and make a ‘social economy’ a core issue.

The candidates’ general views toward reforming the current structure of corporate governance are the same, whereas their pivots are different. Ms. Park puts more weight on fair trade than on reforming corporate governance. Mr. Moon pursues conglomerate reform through re-introduction of the Regulations on Total Equity Investment etc.

Issues with corporate governance such as Regulations on Total Equity Investment, a ban on cross-shareholdings, and separation of financial service institutions and industrial capital clearly show the differences between the candidates. Mr. Moon insists on re-introducing Regulations on Total Equity Investment, while Ms. Park regards the Regulations ineffective.

Although the candidates are against new cross-shareholdings, they also have differences regarding existing cross-shareholding arrangements. Mr. Moon would ban all existing cross-shareholdings arrangements within three years. Ms. Park stated that she would leave elimination of the existing arrangements to the discretion of the companies concerned.

The candidates have slight differences in terms of methodology on the shared growth of SMEs and conglomerates and reinforcing fair trade, but the stands are generally the same. In particular, they suggest stronger penalties for illegal activity by conglomerate executives and unfair corporate practices such as illegal insider trading. Protecting local markets from Super Supermarkets (SSM) has also been suggested by the candidates.

[Table 1] Reducing Economic Concentration and Reforming Conglomerate

2. Policies regarding Labor & Employment

The candidates have similar stands on job creation and alleviation of discrimination, but their stands on the level of restrictions and autonomy vary. Ms. Park has suggested employment policies which focus on economic growth and employment-to-population ratio, and labor policies which consider economic impact of those policies and the situation of companies. On the other side, Mr. Moon is focusing on direct intervention in the market through such policies as a youth employment quota, extension of the retirement age, and limitations on the use of non-regular and subcontracted workers.

[Table 2] Comparison of Policies on Non-Regular Workers

Ms. Park emphasizes alleviation of discrimination against non-regular workers, whereas Mr. Moon focus on limiting the use of non-regular workers as well as banning discrimination against non-regular workers.

[Table 3] Comparison of Policies on In-house Subcontract Workers

[Table 4] Comparison of Policies on Reduction of Working Hours

Ms. Park is focusing on voluntary participation of companies and public institutions through a Public Disclosure System of Employment Status and strengthening related regulation under the current legislative framework. Mr. Moon has proposed to introduce new legislation such as an Equal Employment Act, and establish a principle of equal payment for equal work value.

[Table 5] Comparison of Policies on Youth, Women & Elderly

Meanwhile, the candidates desire to extend the retirement age to 60 and increase employment for youth and women, but each with different action plans. Ms. Park’s proposal is a balanced approach aiming to increase employment without harming the business environment by, for example, adopting a wage peak system. On the other hand, Mr. Moon has suggested a number of restrictive policies for enterprises to apply, such as mandatory employment of youth.

As for revision of the Trade Union & Labor Relations Adjustment Act (TULRAA), Ms. Park emphasized the tripartite agreement, while Mr. Moon has reflected labor group demands in his pledges. In detail, Ms. Park proposed that tripartite constituents should reach an agreement before making any changes to the current TULRAA. But Mr. Moon has proposed to revise the TULRAA and guarantee 3 basic labor rights to atypical workers.

3. Welfare Policies

Expansion of welfare is part of the platform for the candidates. The welfare pledges by Mr. Moon are focused on achieving universal welfare. Meanwhile Ms. Park’s welfare pledges are mainly focused on childcare and education. In detail, Ms. Park plans to provide free childcare for infants under 5 years old and reduce college tuition. Mr. Moon plans to establish universal welfare through such measures as providing free school meals, childcare, medical care and half price tuition (3+1), increasing the Basic Old-age and Disability pensions and introducing a childcare allowance.

The costs associated with Mr. Moon’s welfare pledges are estimated to be greater than those for Ms. Park. According to projected costs announced by each party back in April during the general elections, DUP pledges, at 164 trillion KRW($151 billion USD), are expected to be 2.2 times bigger than Saenuri Party pledges (75 trillion KRW≒$69 billion USD). However, according to calculations by the Korea Economic Research Institute (KERI), actual costs will be much higher than the amounts announced: Saenuri Party welfare pledges are estimated at 281 trillion KRW ($259 billion USD), while DUP pledges are estimated to cost 572 trillion KRW ($527 billion USD).

[Table 6] Comparison of Welfare Policies