A double-edged sword

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A double-edged sword

The ruling Grand National Party and the Ministry of Employment and Labor announced measures to ease inequalities for contractual employees in the public sector. Under the measures, of 340,000 people employed under specific contracts in the public sector, 97,000 will have their contracts renewed to a permanent basis next year. Also, discrepancies in pay and other benefits between permanent and contractual workers will be resolved to some extent.

Employees under contract terms will enjoy the same benefits in allowances as their colleagues on permanent payroll. The public-sector guidelines will be sent to the private sector to discourage companies from discriminative actions in training and other welfare benefits for employees under contract.

The conditions of contractual employment have long been a hot issue in society. There are too many people working under short-term contracts. According to government data, over 6 million people - one out of three with jobs - are part of the irregular workforce. The number is among the highest of the member economies of the OECD. These employees are paid less and work under constant fear of being fired. In general, their monthly salaries amount to just 60 percent of what gets paid to employees on permanent payroll. They are the epicenter for wealth polarization and social conflict. The government and ruling party are right to start with the public sector to solve the problem.

The motive is good, but the government and ruling party got the method wrong. The government and ruling party had not thoroughly discussed and studied the problem. The main issue was to improve the conditions and discriminative terms on the contracts - not turn the contract jobs into permanent ones.

In September, the government suggested subsidizing contractual employees with national pension funds and labor insurance rates. It also proposed increasing their salaries to 80 percent of those on permanent payroll. But the government did not explain why it suddenly veered away from the position two months ago after meeting with the ruling party.

Contractual employment is a double-edged sword - it aggravates income polarization but at the same time increases jobs. Rigidity in the labor market would send companies seeking labor alternatives in overseas markets and also discourage foreign capital investment. The government and the ruling party are avoiding the forest for the trees if they go on with this new plan.
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