[CULTURAL DIMENSIONS]Resolving labor-business conflictOver the past few months, “anti-business attitudes” has become a popular phrase in Korea. The term refers to the increase in labor activism that has emerged from the perceived pro-labor policies of the Roh Moo-hyun administration. In a survey of 22 countries reported recently, Korea ranked first in anti-business attitudes, indicating that the issue may be more than media hype. Interestingly, the survey was conducted in 2001. If the same survey were held today, Korea would no doubt show an even higher level of anti-business attitudes.
But this masks substantial improvements in the business climate that have occurred since the 1997 economic crisis. Since then, there has been a sea change in attitudes toward foreign investment. The need for foreign investment has become widely accepted in society, and government policy continues to encourage it. To be sure, traditional suspicion about foreign investment remains, but it now makes itself heard in the form of left-wing opposition to globalization. The fall in foreign investment in 2003 is a result of anti-Americanism and labor activism rather than a change in government policy or public attitudes.
Domestically, the fall in interest rates since the economic crisis has made it easier for entrepreneurs to start a business. Though the venture boom of the late 1990s has faded, it helped create a business environment that supported entrepreneurship and risk taking. This environment helped Korea take the lead in the development of broadband Internet access, which has helped to spur the rise of an entire Internet-based economy and culture.
Amid these accomplishments, the degree of worry over anti-business attitudes is curious. From a business perspective, the cause is labor unrest. Like many other social movements in Korea, labor unions have a decidedly anti-capitalist, radical left-wing core. Workplace issues are frequently framed in the language of class conflict, which management sees as threatening. The rhetoric of labor unions thus clouds management perceptions of public attitudes toward business. Rather than spending its energy fighting a radicalized union, management looks for opportunities to move production to another country where labor relations are less troublesome. China is the most popular choice because of its low costs and proximity to Korea.
The problem of radicalized unions also affects foreign investment. Foreign companies in Korea know that radical implies anti-foreign ― particularly anti-American and anti-Japanese ― which creates a climate of distrust. If Korea possessed distinct advantages as a place for foreign investment, then foreign companies would have a higher tolerance for labor tension. This is not the case, however, as China continues to attract investment from around the world. The list of potentially attractive countries is growing and competition to attract investment is increasing.
The public, meanwhile, sits between radicalized unions and worried management. It knows that business has used close relations with the political elite to its advantage in the past. It knows that during the years of dictatorship, labor was suppressed and that government and business collaborated to their advantage. It also knows that the Korean economy cannot endure endless labor strife without cost. Above all, the public knows that Korean prosperity is fragile.
This public wisdom offers hope of finding a way out of the current impasse. Worry about “anti-business attitudes” is a pro-business, anti-labor stance that will only harden the lines of debate. To be sure, improving the business environment is an urgent matter as Koreans and foreigners increasingly shun new job-creating investments in Korea. Business environments are complex habitats that include more than relations between labor and management. Infrastructure, rule of law, quality of the work force, and size of the market are a few of the other factors that affect the overall business environment.
Instead of taking sides, the media should report objectively and critically on the diverse developments that affect the business environment as a whole. Intimidating labor into silence will only give cover to the radical core, ensuring that the tense labor relations will continue for years to come.
* The writer is an associate professor at Kyoto University in Japan.
by Robert J. Fouser