Wrong diagnosis, wrong prescription and public hardship

Lee Sang-ryeol

The author is a senior editorial writer at the JoongAng Ilbo. 

The June 3 local elections were, in many ways, a victory that felt like a defeat for President Lee Jae Myung’s administration. The ruling party won 12 of 16 metropolitan mayoral and gubernatorial races, yet it lost the most symbolically important contest: the Seoul mayoral election.

The Democratic Party candidate, widely described as Lee’s personal choice and nicknamed a “Lee pick,” was defeated by incumbent Seoul Mayor Oh Se-hoon. In Busan’s Buk-A by-election, former presidential AI policy secretary Ha Jung-woo lost to Han Dong-hoon, the former People Power Party leader and a prominent political rival of Lee. In Seongnam, the city that launched Lee’s political career, former senior presidential secretary Kim Byung-wook was defeated by incumbent Mayor Shin Sang-jin.

Voters rejected several candidates closely associated with the president while helping revive veteran conservative politicians. From Lee’s perspective, the outcome must have felt like a personal setback. That may explain why, at a news conference marking the first anniversary of his inauguration, he described the election results as “a warning from the people” directed at him and his administration.

What followed was striking. Lee immediately added that there would be no change in the administration’s governing direction and that it simply needed to work harder. The contradiction is difficult to ignore. If there were no fundamental problems with the administration’s policies, why did so many of the president’s preferred candidates lose?

Lee remarked that there are “10,000 reasons” a party can lose an election. There is some truth to that. Yet in democratic societies, defeats suffered by governing parties generally stem from one of two causes: concerns about democratic governance or dissatisfaction with people's livelihoods.

Many voters viewed measures such as the ruling party’s proposed special counsel bill to review and potentially void prosecutions that it argues were politically motivated, including several cases involving President Lee before his election, as threats to legal order and individual freedom. The party’s support for a Starbucks Korea boycott campaign also alienated some voters who saw it as an unnecessary intrusion into personal choice.

What about the economy? Lee may feel unfairly criticized. The Kospi has climbed above 8,000 and first-quarter economic growth reached 1.8 percent, with nominal growth at 10.5 percent. Yet these achievements owe much to the semiconductor boom fueled by the global AI surge.

Indicators that affect daily life tell a different story. Consumer prices rose 3.1 percent in May. Youth employment has declined for 25 consecutive months, with the employment rate for those aged 15 to 29 standing at 43.8 percent. Housing costs have risen sharply. Over the past year, Seoul apartment prices climbed roughly 15 percent, while jeonse prices rose about 7 percent and monthly rents about 9 percent. Even many middle-class households struggle to absorb increases of that magnitude.

Some of the hardship may be attributable to the Middle East conflict and external economic pressures. What appears to have angered voters more, however, is the administration’s perception of those difficulties. Kim Yong-beom, the presidential chief of staff for policy, described the “three highs” — high interest rates, inflation and exchange rates — as the unavoidable cost of success during Korea’s economic transition to a higher level of growth. Such remarks suggested a troubling indifference to the burden felt by ordinary households.

The Blue House appears to believe that the economy is performing reasonably well despite difficult circumstances. From the perspective of many citizens, however, that assessment resembles wishful thinking. The absence of major housing or youth employment initiatives over the past year may reflect that mindset. Lee has argued that his administration has successfully contained housing price pressures and described the worsening jeonse market as part of a normalization process.

Sound policy requires accurate diagnosis. On housing, Lee has signaled higher property holding taxes. Critics warn that the burden could be passed on to tenants, driving both home prices and rents even higher. Such proposals seem disconnected from the message voters delivered at the ballot box.

History offers repeated examples of governments paying a price for ignoring public sentiment. The housing policy failures of the Moon Jae-in administration and the medical school quota controversy under former President Yoon Suk Yeol both illustrate the risks. A government that truly believes the people come first should be careful not to repeat those mistakes.