The financial crisis and the IMF relief funds of 1997 in Korea marked the beginning of the Kim Dae Jung Administration, so-called "Government of the People." The restructuring agenda of President Kim to overcome the crisis includes not only an economic element to reform finance, conglomerate ("chaebol") and industry policy but also a political component to reform the pubic sector, including the government, and the overall political structure. In the process, Neoliberalism appears to define the fundamental framework in that the administration focuses upon reducing and privatizing the oversized, inefficient public sector while emphasizing the rationality of the market and the government economic policy based on the market theory. The accumulative structural crisis of global capitalism since the 70s and the consequent decline of the Keynsian welfare state resulted in the rise of Neoconservatives to political power in many countries and the consequent Neoliberal government policy, which will remains influential in the 90s. This absolute belief in market economy, however, has already shown limitations in the restructuring process of Asian economy at crisis, which was designed by the U.S. and the IMF with the goal of implementian free market economy at a global scale. Prior to the presidential race, Kim Dae Jung proposed so-called "democratic market economy," a form of socialist market economy similar to the German model of moderate Neoliberalism. Undergoing the presidential campaign, national financial and foreign currency crisis and the IMF relief funds, however, the "Government of the People" under President Kim became more inclined toward bare Neoliberalim, and now appears to be a loyal follower of the neoliberal policy of the IMP. Consequently. the social policy of the Kim administration regarding public welfare is also characterized by oblique Neoliberalism despite the slogan to "develop democracy and market economy simultaneously." Even the establishment of the labor-management-government tripartite committee and the resulting social consensus up to a certain level have failed to deflect such marked limitations of neoliberal policy. Among various reform policies of the "Government of the People," this study aims to focus upon the labor and unemployment policy in light of Neoliberalism, and to explore their content, direction and limitations and possible policy recommendation.irection and limitations and possible policy recommendation.