Collusion illusionCurrently, the cooperation between labor and management in Korea is short-sighted. In fact, it is systematic collusion that only benefits full-time regular workers and management, and rarely contributes to improving productivity, experts pointed out at a Korean Economic Association seminar yesterday.
Several big-company labor unions, mostly made up of full-time workers, are awarded benefits in exchange for looking the other way when the management tries to bend, or violate, local laws. The economic burdens caused by such collusion are passed to contract workers and employees of the companies’ suppliers, said the experts. As a result, the labor-management relations of several major companies seemingly look very stable, but only due to the the sacrifices of these victims. The criticism rings very true.
With the constant threat of their major weapon ― strikes ― the labor unions of many conglomerates have mostly gotten what they have asked for. Sometimes they pressed management by attacking the companies’ long-standing weak ownership structure, or by violating laws when handing over management rights. But under this system, full-time workers are the only ones who benefit.
According to the Labor Ministry, the total wages of part-time or contract workers last year amounted to only 48.2 percent of those of full-time workers. The average wage of small suppliers to major companies amounted to only 60 percent of their client companies.
The small suppliers complained, “If we raise wages for workers, our client companies think we made extra profits, and slash prices for our supplies.” This is only the tip of the iceberg of the social burdens placed on part-time workers and small suppliers by the labor-management collusion of big firms.
There is a huge difference between labor-management cooperation and labor-management collusion. Collusion between the two sides eventually leads to corruption. Look at all the corrupt labor union leaders pocketing illicit cash in exchange for manipulating the hiring system. It is hard to imagine productivity improving or investment rising under these circumstances. Foreign investors are also being driven away. In order to break such a vicious cycle, more transparent management is a necessity.
Revolutions in technology and management will only be a dream as long as companies keep squeezing part-time employees and small supplier companies. Sometimes taking a step back and making small concessions can benefit you in the long run.