&#91VIEWPOINT&#93A scheme that just won't work

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[VIEWPOINT]A scheme that just won't work

The Ministry of Labor recently reported to the presidential transition committee that it would introduce a work permit system under which foreign workers can receive full labor rights and wages similar in level to what Korean workers are paid.

The work permit system, even though its intentions are good, should not be accepted in Korea, considering the harsh realities of small and medium-sized businesses, which hire a great number of foreign workers. The work permit system is not planned to meet the interests of foreign workers or civic groups. The goal is to relieve the shortage of labor at small and medium-sized businesses.

Why are these companies against the work permit system? First, adopting it would be too costly. As of now, Korean workers receive an average monthly salary of 1.15 million won ($980) and foreign workers 940,000 won. If the work permit system is introduced, businesses would have to pay approximately 210,000 won a month more for a foreign worker. Furthermore, if such things as retirement grants, bonuses, vacations and pensions are included, labor costs would soar by 30 percent. Those who argue for the work permit system say that the rise in labor costs will not occur if businesses do not pay for foreign workers' boarding and meals, which the firms provide for industrial trainees under the current scheme. If a business deducts housing costs from foreign workers' paychecks, they will move to one that does not.

Second, the system would make the already rigid Korean labor market more rigid. Almost all foreign investors agree that the Korean labor market is inflexible. They avoid investing in Korea because they cannot easily fire workers even when their businesses are in deep recession. If foreign workers in Korea receive full labor rights and form labor unions, and if they are supported by labor and human rights groups, their wages and power will increase. If this happens, small and medium-sized businesses will have no choice but to hire high-wage foreign workers who cannot be fired when necessary.

Foreign workers employed under the work permit system will form their regional and workplace labor unions. They will be supported by umbrella unions and human rights groups that will encourage them to take collective action for higher wages and better working conditions. When these things happen, small and medium-sized businesses will have no choice but to hire high-wage foreign workers even though their productivity lags.

Third, the work permit system will not help reduce the number of illegal foreign workers. The argument that it will is flawed. Among the 290,000 illegal foreign workers, only 50,000, or 17 percent of the total, left the official trainee program. Most of the illegal workers entered Korea on short-term visas that permit their visit to relatives or sightseeing. The reason for the increase of illegal entrants is not the trainee system but people's tolerance toward ethnic Koreans from China and the government's lack of will to stop illegal migration.

Views on labor policies for foreign workers differ greatly whether we look at them from the perspective of industry or human rights. Korea's per capita gross national product is $9,700, Japan's is $37,000. Japan, despite its more advan-ced economy, employs a stricter foreign labor policy. It does not have the work permit system but a program that is similar to that of Korea's industrial trainee scheme. This is because Japan formulates foreign labor policies from the industrial perspective. The Japanese case is the example we have to follow.

* The writer is the executive managing director of the Korean Federation of Small and Medium Business.


by Lee Kuk-myung
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