As the younger generation turns away from the ruling leftist Democratic Party (DP), the party’s key presidential hopefuls are introducing populist policies that are aimed at attracting support from young people. Conservative politicians are criticizing these efforts as unrealistic attempts to buy votes from people using the government’s budget – and taxpayer’s money.
During the latest Seoul mayoral by-elections held in April, more than 70 percent of males in their 20s voted for the opposition People Power Party (PPP), according to exit polls. Young people earlier tended to support the liberal party, but the recent change in the political trend has shocked the DP. Also, recent opinion polls show possible DP presidential candidates falling behind against former Prosecutor General Yoon Seok-youl, who has not yet decided which party he would join or whether he will enter politics at all.
Yoon was leading all rival presidential hopefuls from the DP in hypothetical two-way races, the latest opinion poll from Realmeter showed on May 6. The poll showed support for Yoon was at 44.5 percent, 8 percentage points ahead of Gyeonggi Gov. Lee Jae-myung with 36.2 percent.
Yoon had 48 percent of the support in a two-way contest against Lee Nak-yon, a lawmaker from the DP and former prime minister under the Moon Jae-in administration, who received 31.3 percent of support. In another hypothetical race with former Prime Minister Chung Sye-kyun, Yoon had 48.7 percent versus Chung’s 25.7 percent.
One of the hottest populist policies under debate in South Korea was presented by Gov. Lee, who is well known for his progressive agenda. He suggested providing 10 million won ($8,896) to young people who decide not to attend college to have them travel around the world. “I think it is a good thing to allow young people to decide what is better between attending a 4-year college and traveling around the world when it comes to developing their career plans and capabilities,” Lee said on May 4. “I wonder how it would come out if the government could provide them with 10 million won to travel around the world.”
Members of the PPP and even some of the DP argued that Lee is trying to lure young people with money.
After this became controversial in South Korea, Lee stepped back and said it was just an idea. “How can we debate about anything if they distort ideas based on brainstorming as populism?” Lee said.
Yoon Hee-sook, a lawmaker from the PPP, said Gov. Lee should keep his brainstorming ideas to himself and not share them with the media until the ideas are fully ready. “You are in a position that can affect people’s lives, so please think thoroughly about important issues,” said Yoon, referring to Lee as a key presidential hopeful.
“Why did you send your two kids to college?” Yoon asked. “I am sure it was because you believed it would be better for them. If you change young people’s educational pathway by offering them money to travel around the world and their lives become worse than your children’s, how are you going to take responsibility?”
Lee Nak-yon, the former party leader of the DP, suggested providing young men who finished their mandatory military service with money. “I would like to have young people, who are starting a new life after military service, have 30 million won ($26,690) to begin with,” Lee said on May 5. He plans to raise the wage of non-career soldiers doing mandatory service and offer them savings account programs with a 6 percent annual interest rate.
“President Moon Jae-in’s election pledges include ways to raise regular soldiers’ wages to the level of 50 percent of the minimum wage,” Lee said. “There will be ways to expand incentives by applying a newly passed military service law that provides an up to 6 percent annual rate savings program.”
Currently, regular soldiers, or non-career soldiers, receive 33 percent of the national minimum wage. A sergeant, the highest rank for a non-career soldier, receives 608,500 won ($541) a month. The wage has gone up significantly under the Moon Jae-in administration. It was 216,000 won in 2017, was raised to 405,700 won in 2018, and gradually increased since then.
However, experts and conservatives in South Korea are arguing that Lee’s plan is unrealistic. If the wage was raised to 911,240 won a month to make it 50 percent of the minimum wage, a soldier would able to save around 19 million won with the 6 percent rate savings account throughout the 18-month mandatory service term. When asked whether it would be the government’s burden to provide the rest of the money to meet the 30 million won goal, Lee responded with “isn’t raising wages for soldiers a burden as well?”
Lee Nak-yon of the DP also argued that the government should spend an increased amount of money collected from the comprehensive real estate tax to support young single households’ rent expenses.
The comprehensive real estate tax was introduced in 2005 to prevent speculation in the real estate market. It collects additional taxes from people who own more than one real estate property. The Moon Jae-in administration expanded the number of people who are required to pay the tax by lowering the price of real estate that qualifies for the tax and by raising the tax rate.
According to the National Assembly Budget Office, the government collected 952.4 billion won in comprehensive real estate tax in 2019, and the figure is expected to rise to near 6 trillion won this year, rising nearly 600 percent in about 2 years. The number of people who have to pay comprehensive real estate tax rose from 517,000 to around 856,000 this year.
“An individual who owns multiple real estate properties paid 332,000 won in comprehensive real estate tax per month on average, and young people living near the Seoul metropolitan area pay 524,000 won a month for rent,” Lee said. “We have to ask ourselves whether it is justified to see that the taxes paid by people who own multiple homes are larger than the rent that young people with no homes pay.”
Former Prime Minister Chung Sye-kyun said he plans to have people start adulthood with 100 million won by providing them with a 20-year cumulative funding program, which would begin when a new baby is born. He did not specify the details of his plan yet.
Some members from the DP, including Gov. Lee Jae-myung, are calling for an unconditional basic income program as well. Lee’s long-term plan is to provide 6 million won per person a year within 10 years by gradually increasing it from 1 million won. This would require about 300 trillion won per year. The government’s total expenditure this year is set at 555.8 trillion won. Lee’s plan would require half of the government’s total expenditure. Lee said he can make the money from by reducing the tax deduction and raising taxes related to carbon and data.
