[Viewpoint] To stop strikes, remember the Iron Lady

The Korean Railway Workers’ Union has backed off. This is because the government decided to go with the law. The people also lashed out against the derailment of the union. It had no choice but to stop its strike. However, it is still not very trustworthy. There is no way of knowing when it will strike again.

The Korean Railway Workers’ Union is rich. It has abundant funds for protest, too. The average annual salary of a Korail worker is 60 million won ($51,900). Around 400 employees have an annual salary that is close to that of the president of the company, at around 80 million won. The union dues are around 11 billion won per year. The union uses its dues to feed those who have been laid off. It spends around 54 million won per person fired.

It is not easy to tame such a great union. However, even unions like this have an Achilles’ heel. Advanced countries have found and got rid of this fatal spot. They have changed the bad habits and structure of labor unions. The first person to do this was Britain’s Prime Minister Margaret Thatcher.

In 1984, the National Union of Mineworkers in the U.K. went on strike. It was a huge union of around 180,000 members. It had enough power to change the administration of the country. The chairman of the union, Arthur Scargill, was known as “the emperor.” Executives of the union believed in their previous experiences. With any strike that went on for a long time, the government folded, and would resolve the situation with appropriate negotiations.

But the Thatcher government was different. It was consistent in its insistence on law and order. It responded strategically. It increased its storage of emergency coal. It conducted careful promotions and managed public opinion. It appealed to the people to endure the hardship. The majority of the people took Prime Minister Thatcher’s side. The government persuaded union members to sue the executives who pursued the strike.

The union had started to lose in the public opinion contest when two miners filed a civil lawsuit against the executives. It asked the court to judge the lawfulness of the strike. The court judged it to be an illegal strike, and ordered the chairman to pay 1,000 pounds ($1,645) compensation and the union, 200,000 pounds. It ordered that their properties be seized if they did not make the payment. NUM moved its properties overseas, but the court managed to trace and reclaim them. It was a fatal hit for the union.

NUM fell. Its fatal spot had been hit by compensation fees and fines. Punishing it with money was an exquisite final hit. Other unions became aware of the huge compensation the court had handed down. Strikes changed in a qualitative way. The chronic disease of British labor strikes had been treated quickly and efficiently.

In December 2005, the Transport Workers Unions of America, or TWU, went on an illegal strike. New York City applied for a provisional disposition to end the strike. The New York Court ordered the union to pay a fine of $1 million for each day the strike prohibition order was violated. The union only collected dues worth $3 million. It surrendered to the threat of financial punishment. The strike ended in just three days.

Financial punishment has great destructive power. Demanding compensation for damages is a special weapon. On the other hand, the effects of criminal punishments are limited. Arresting a union executive reinforces camaraderie within the union. It adds to the executive’s glamorous fighting experience. The sloppy will to fight brings members of the illegal strike together again.

However, a civil lawsuit is different. The effects of a lawsuit are delicate but mighty. The strikers’ camaraderie weakens the higher the compensation amount is. It becomes harder to come together if individual executives are made to pay compensation, too. This causes cracks in the union’s solidarity.

Labor and management at Korean companies both have similar experiences. But the effects of civil lawsuits are not as momentous for public companies. It was in 2002 when the Railway Trade Workers’ Union went on strike. The company won the first and second hearings, and was compensated by 8.03 billion won ($6.96 million). The lawsuit was withdrawn as a sign of reconciliation in the spirit of the World Cup. The union went on strike in March 2006, too. A compensation lawsuit was filed in September the same year. It won the first judgment and second judgment in March, too, with damages awarded of 6.9 billion won. It is still pending in the Supreme Court, but seizure of properties has been authorized. However, the company did not take proper action.

The recent railway union strike caused operational damage worth 9.1 billion won. The company said it would sue for compensation of damages. A poor student from Siheung did not make it to his Seoul National University entrance examination interview because the train stopped. The dumbfounded frustration of the student provoked anger in public opinion. The union should compensate for damages caused by this, also. Compensation for damages is a surefire way to fix the bad habit of illegal strikes.

*The writer is the executive editor of the JoongAng Ilbo.

by Park Bo-gyoon