Time to temper walkoutsUnionized truck drivers have already begun their walkout, as have construction firm employees, and parcel delivery and courier service workers plan to follow suit from Sunday. Adding to the threat of paralysis to productivity, employees at Hyundai Motor and Kia Motors also warned they may put down their tools next month. And as if this weren’t enough, the umbrella group Korean Confederation of Trade Unions is planning a nationwide strike in August. Korean law sanctions such collective action by workers, but the timing is problematic as overall industrial activity has been dampened by sluggish overseas demand.
Even if the crisis in the euro zone pivoting around Greece, Spain and potentially Italy dies down, the domestic economy will not pick up anytime soon. Exports grew a mere 0.6 percent in the first five months of this year and the trade surplus hit $6 billion in May, far short of the $13 billion targeted for the first half of the year.
As the global economy creaks under the strain of poor indications from Europe, the U.S. and China, the government plans to cut this year’s economic growth outlook from 3.7 percent, which was always seen as optimistic. Some private think tanks claim it will fail to make 3 percent as economic uncertainty could worsen in the second half and potentially drag on for several years.
The ongoing and future cluster of strikes spells more bad news for the economy. The logistics industry, for example, has already been hit by the truckers’ strike even though this has not hit full strength. The volume of freight at Gwangyang container port in South Jeolla has almost halved, while logistical activities at Yeosu Industrial Complex have ground to a complete halt.
When couriers join the strike, the home delivery and online shopping industries are expected to suffer daily losses of 100 billion won ($86.4 million). A walkout at carmakers that freezes up production lines could shake the country’s core industry base.
Walkouts need to carried out with an eye on prevailing economic conditions as it is workers who will suffer if the country hits another economic brick wall like the 1997 Asian currency crisis and they lose their jobs. As some of the strikes have political undertones ahead of this year’s presidential election, we urge unions to refrain from launching full strikes this year and work harder to find common ground with the government and management.