開催報告（韓国）：第1回海外委託調査員連絡会議・国別報告会
Report on the Korean Labor Market and Employment Relations
（2003年11月19日）
Speaker
Lee Tack-myun / Senior Researcher, Research Center, Federation of Korean Trade Unions
Report
It is my pleasure and honor to have an opportunity to participate in the Liason Meeting, and to discuss the structures and changes of Korean labor market with honorable delegates from many countries. Recent changes in Korean labour market and employment relations were so drastic and far-reaching that all kinds of economic agents, government, management, and trade union, have had many difficulties in interpreting them and finding how to strategically respond to them. First, let me review briefly these changes.
1.Recent changes
Since the IMF economic crisis, the key features of the changes in Korean labor market and employment relations have been described in a single word: flexibilization. The government did not pay due considerations to the problem of labor market flexibility. What does the flexibility in labor markets really mean? Is it really indispensible to recover the ailing economy? If it is, in what ways can we enhance it without putting the lives of many innocent workers in jeopardy? -- these were the really important questions a responsible government should have addressed. However, Korean government has never paid adequate attention to these fundamental questions. Instead, it changed major labor laws and regulations in the direction of making layoffs easier, as if "numerical flexibility" were the sole reasonable solution to the problem of labor market rigidity. As a result, the number of irregular workers has rapidly increased, and discriminations against them has become one of the major social problems which needed to be addressed urgently. Especially, young people, women, and the employees of the small-scale workplaces have had to endure the most unfavorable conditions.
These situations have not been improved in the new millenium, and from 2001 onwards, continued to inflict harmful effects on the stability of Korean labor market and industrial relations. Now we review situations of 2001-2003 Korean labour market and employment relations in more detail. In 2001, growth rate of Korean economy steadily went down, reaching the lowest record of 1.8% in the third quarter of the year. However, in spite of economic slowdown, the overall indicators in the labor market were, on the average, benevolent. The increase of the employed were steady, showing an 1% of increase rate, and the unemployment rate was consistently decreasing, from the 4.8% in the first quarter to its lowest level of 3.3% in the third quarter of the year. The increase of irregular workers, which had been galloping in 2000, now slowed down remarkably. The proportion of regular workers hovered around 49%, and that of irregular workers remained at the level of 51%. Youth unemployment has not been alleviated from 2000 onwards. During the period of 1997 to 2001, 290 thousand decent jobs for the young graduates have been lost. Number of the unemployed among the younger people has not dropped compared to 2000, sustaining the high level of 300 thousands. The proportion of the employed among new graduates has plunged from 65% before the economic crisis to 25% in 2001. Whereas the number of the employed among the college-university graduates remained stable, situations of those with lower level of educational attainment were even harsher. Both the number and proportion of the employed among the high school graduates began to decrease from the third quarter of 2000. The trend has intensified since the first quarter of 2001. The number of the employed among the high school graduates have decreased 3.5% compared to the same period of the previous year. The average working hours were around 50 hours a week. Men were working longer than women. Workers of smaller enterprises worked longer than those of larger ones(52 hours a week for establishments employing less than 299 workers, vs. 49 hours for those employing more than 300).
In 2002, the economy regained its growth momentum, showing 5.8% growth rate in the first, and 6.4% in the second quarter. The number of employed also increased by 4.0% in the first quarter compared to the same period of the previous year. The unemployment rate decreased to 3.6% in the first quarter, coming down to its lowest level of 2.9% in May. But employment was made mainly among the irregular jobs, resulting in the further increase of the number of irregular workers. In November, 2001, in proportion of the irregular workers amounted to 52.2%, with the increase of daily workers leading the trend. Labor disputes have also increased in 2001. Compared to the previous year, frequencies of labor disputes increased by 31.5%, number of participants by 27.0%, and the working days lost by 200% respectively.
In 2003, economic growth dampened again. Growth rate of GDP in the first half of the year hits the record lowest 2.7% after 1999. Accordingly, the labor market indicators begin to deteriorate. Unemployment rate was 3.3%, slightly higher than expected. Both the size of economically active population and the number of the employed decreased for the first time after 1999. The growth rate of economically active population surpassed, for the first time after 1999, that of the number of the employed, which means the number of the unemployed and the unemployment rate should still be higher in near future. The labour market conditions for the young age groups deteriorated also. Unemployment rate among young people grows more rapidly than the other age group. The unemployment rate of the age group(15-29 years old), 8.4% in the first, 7.3% in the second quarter of 2003, are higher than that of the previous year, 7.8% and 6.3% in respective periods. In 2002, youth unemployment rate was as 3.0, and 2.9 times higher as that of the adult unemployment(30-54 years old). In 2003, it was 3.6 and 3.1 times higher. Therefore the younger age goups are more badly hurt by the economic downturn. The proportion of irregular workers among all waged employees lowered slightly, from 51.2%, 51.9% of the first, and second quarters of 2002 to 49.4%, 50.0% of the same periods in 2003. but the general level is still high.
2.The Issues
These are the recent changes in the Korean labour market and employment relations. These changes, characterized as the processes of flexibilization, are not peculiar to the Korean labour market. They are more or less "global trend". But the consequences these changes in the labor market have produced are unique it its scope and severity. As a result of the blind and brutal pursuit of labor marker flexibility, Korean workers have had to suffer from chronical job insecurity, severe distributive inequality, and persistent discriminations between regular and irregular jobs. In addition, they are severely restricted in using their legally guaranteed right to strike. Now, we are going to focus on these issues one by one.
First, In the aftermath of the IMF economic crisis, a huge scale of layoffs became the rule rather than exception in the Korean labour market. Growing numbers of workers were demoted to the status of irregular and contingent workers which could be randomly laid off whenever the circumstances turns unfavorable to the management. Furthermore, the government and the business leaders have made joint efforts to modify existing labor-related laws and regulations in order that the management can employ and lay off workers more easily, whether they hold regular jobs or not. According to newspaper reports few weeks ago, in one of the leading big business corporations in Korea, no less than 5000 workers were laid off in a restructuring process. The reports feared that other large corporations would follow suit. Fearful of possible layoff, workers could have no commitment to what they do in current jobs, and might well be subject to myopic opportunism in their work places.
Second, due to the rapid changes in the labor market and employment structure, the income distribution in Korean society became more and more unequal, which has come to be an another cause of workers' dissatisfaction. After the IMF crisis, the discrepancy between incomes earned by wage labor and those earned from financial/real estate assets have consistently widened. This situation is vividly reflected in the official statistics. Gini coefficient was 0.283 in 1997 just before the crisis. But in 1998 it jumped to the level of 0.316, and continues to remain at the level of 0.310 until 2002. Increasing income inequality can lead to social disintegration, causing social unrests.
Third, there has been a wide gap between the regular and irregular workers in terms of wage income, extra benefits, and working hours, etc., and the discrepancies between regular and irregular workers are widening year after year. According to an analysis of the official statistics, monthly wage of irregular worker amounts to 51% of that of regular worker in 2003, which were 52.7% in 2002. Irregular workers work longer than regular workers. In 2002, irregular workers worked 45.5hours per week whereas regular workers working 44 hours. In 2003, work hour for irregular workers reduced to 44.1 hours per week, a 1.4 hours decrease. In contrast, work hour for regular workers reduced to 41.8 hours, a much larger decrease than that of irregular workers. Wage income inequalities among workers get more severe, with wage income of the upper 10% group amounting to 5.6 times of that of the lower 10% group in 2003. It was 5.2 times in 2001, and 5.5 times in 2002, meaning that it continues to increase in three consecutive years. It is much higher than that of the United States(4.3 times), which is on top of the OECD countries in terms of wage-income inequalities. Moreover, the gap between irregular and regular workers gets wider when we take into considerations various extra benefits and social insurance provisions.
Fourth, Korean workers are severely restricted in resorting to their legally guaranteed right to strike. To the 'illegal' strikes by the unions(it is very difficult for the labor to go on a strike through the legal procedures because of many imperfections in the legal system. Therefore, most strikes breaking out under the current legal system usually tend to be treated as illegal.), the management began to respond not by resorting to the police and various means of state repression, but by taking "legal measures" such as freezing workers assets and properties in order to compensate the losses incurred by labour's "illegal" strikes. These new responses of the management's began to trigger a series of major labor disputes and become a key factor to deteriorate Korean industrial relations which have already been volatile enough, even leading to the workers' suicides.
3.The efforts
Two national organizations of Korean trade unions, FKTU and KCTU, continues various efforts to stop discrimination against irregular workers. For that matter, the two national centers plan to organize irregular workers, with the results being yet uncertain.
For the solution of the above-mentioned problems, it is necessary not only to centralize the collective bargaining structure by going from the individual establishments level to the industry or sectoral level but to establish a channel through which unions could exert more political clouts. Therefore, the two national organizations are now making arduous efforts to integrate existing unions and to establish pro-labor parties in order to represent workers interests and to win the elections.
As a long-term strategy against the reckless flexibilization drive, FKTU plans to institutionalize some kinds of labor learning programs, co-sponsored by the management and the unions, through which workers can continuously upgrade their skills in order to adapt "flexibly" to rapidly changing environments.
4.An Evaluation of the Problem of Irregular Workers
Most powerful factor of stimulating the usage of irregular workers seems to be employer's cost-economizing motive, whereas the power of the organized labour tends to work, at least in Korea, as a deterrent of the increase of irregular workers. In a sentence, the size and proportion of irregular workers are co-determined by the interplay of management's cost-economizing incentives and labor's organized resistance. In an equilibrium, some kind of balance should be reached where the interplay of the management's cost-minimization motive and the labor's resistance to protect worker's job security leads to an optimal level of irregular workforces. However, the current labor market conditions could never be said to be approaching that equilibrium. The influences of the cost-economizing incentive of the management, supported by the pro-business labor market policies of the government, seem to be overwhelming that of the resistance of the unions.
5.Organization of Irregular Workers
As mentioned above, trade unions, both at the regional level and the national level, are continuously struggling to organize irregular workers. However, the efforts has not yet come to fruition, partly because of the internal conflict of interests among the workers themselves. It would take times for the entire working population to iron out internal differences and to achieve solidarity.
6.Labour Market Reform : Policies and Evaluations
The government once made promises to stop discriminations against irregular workers and to uphold the principle of "equal wage for equal labor" through the firm and consistent reform policies. However, under the unscrupulous pressures on the part of the management, government policy-making went inconsistent and confused, with those promises being left unattended. After months of confusion and wavering, the government finally managed to propose a blueprint about labor market reform. It was called a "road map" for a new industrial relations, whose core ingredients are the securing of labor market flexibility. The unions argued that the proposed roadmap, if put into implementation, will lead to the expansion of the size of irregular work forces and the institutionalization of the discriminations against them. Especially, the roadmap includes some proposals of giving the employers the legal weapons to resist the union's strikes.
These series of labor market reform programs can't be regarded as based on a sound theoretical foundations. Rather, they are based on a kind of superstitious belief that the market can heal all kinds of economic ailments anywhere, anytime, anyhow. Any serious considerations of market theories could undermine the superstitions about market mechanism. A sound scientific inquiry of the market and its efficiency consequences will reveal when the labor market flexibility will produce benevolent implications over the whole economy and when it will lead to the disintegration and collapse of economic harmony. Knowing the limitations of the market, as well as its potentials, is the first step to be taken towards more fruitful and effective policy making. Only by putting the policy-making process on a scientifically sound basis, can the labor market flexibility and the peaceful and healthy coexistence of the employers and the workers be secured.
