Virus-caused jobless crisis

What is needed first is to rescue companies in trouble

The specter of mass layoffs is haunting the world as the coronavirus crisis throws the global economy into turmoil. The International Labor Organization (ILO) forecasts the new coronavirus will "increase global unemployment by almost 25 million," compared with 22 million in the 2008 global financial crisis. After a recent survey of 34 economists, the Wall Street Journal predicted the coronavirus-triggered downturn would cost 5 million U.S. jobs.

South Korea is no exception to the economic and labor crises created by the pandemic. A growing number of companies have been introducing unpaid or paid leaves of absence, or both, for their employees, and the chances are high that many of them will lose their jobs eventually. Some large companies have also put off indefinitely or canceled their plans to hire new employees.

More worrisome is that the unemployment shock could lead to a vicious circle of the economic slowdown weakening both consumption and production. Businesses may feel it difficult to head off the looming crisis with just short-term measures such as temporary leaves of absence. While almost all industries have been affected by the COVID-19 pandemic, industries such as automobile production, aviation, tourism and retail will seemingly bear the brunt of the downturn much more than others.

What is needed first is to rescue companies in trouble. Keeping small- and medium-sized businesses afloat is essential, given that they employ more than 80 percent of workers here. The government should put top priority on offering fresh loans to them and renewing their existing loans so that they can survive to repay debts later.

No less important is to defend flagship industries. That's be-cause small business owners as well as smaller firms will collapse once our key industries go under. Without flourishing industries, who will pay the taxes needed for welfare? It will be impossible to return our economy to health without globally competitive industries.