[Viewpoint] A dysfunctional income structure

Liberal political parties commonly claim they represent workers and the grass-roots. They believe they can solve economic inequality, stifling competition and chronic job shortages. They regard the conservative media and public “ignorance” as stumbling blocks to their goals. But they are seriously wrong.

Simple math can help them snap back to reality.

They would be dumbfounded by simply reading the gap between the average earning of so-called reputable jobs in teaching, public office, banking, car assembly lines, public enterprises and per capita income. Of 25 million economically active people in the country, about 10 percent to 20 percent enjoy incomparable working conditions from the rest.

One is guaranteed a secure and comfortable lifestyle upon joining profitable financial institutions or leading manufacturers like Hyundai Motors, or public enterprises. But life is hard for employees of small or mid-sized firms and companies lower in the hierarchy.

The 1.3 million public-sector employees can also feel safer in job and income security than workers in the private sector.

Those on the payroll of manufacturers like Daewoo Motors, Ssangyong Motors and Hanjin Heavy Industries once enjoyed similar luxuries, but are now camped out on the streets with banner cries against massive layoffs by their troubled employers.

They were brutally cut off from the happier lot. But there is a weaker and more unfortunate group to whom few pay any attention. They are the workforce at small companies supplying parts or services to larger companies that undergo downsizing and other cost-cutting restructuring.

In advanced economies, there is less of an income gap between a few major companies and the greater number of mediocre ones. Wages in the public and private sectors also do not greatly differ, which is why there is more hiring in the public sector in those countries. Because there is less of an income gap, downsizing is also easier. Companies hire more during the good times and do not need to seek cheaper labor at subcontractors. Hiring by large companies takes up a greater share.

Such a structure can be all thanks to unions and liberal parties who fought for a performance pay system, a unified wage system and the principle of guaranteeing similar pay bases for similar work.

The country’s income structure is seriously flawed and dysfunctional. The wage system of advanced countries is spread out like a low hill while Korea’s is in the shape of a mountain. The pinnacle is too high and narrow. There are too few trails and a limited number of ladders and ropes to climb up.

The authorized path is standardized tests. Competition is naturally fierce. Even if you somehow managed to arrive in the top tier, you are equally insecure. The buffers at the bottom are thin and small and the fall could be fatal.

The climbers desperately cling to their ropes and try not to slip. High-paying companies, fully aware of the strong resistance from the workforce, fear hiring. Workers do not complain of long hours because they cannot risk losing their job and must earn when they can.

The share of full-time workers and the employment rate is therefore low. But the all-mighty labor unions and left-wing parties lacking any idea of the reality of our work quality simply want to raise the ceiling. Various regulations and rules are made to secure jobs for life.

In order to the tackle the myriad of problems of an aging society, a low birth rate caused by deferring marriage and birth, the income structure needs to be flattened. By raising the minimum wage and tax and income structure reforms, the social and economic inequalities could narrow. At the same time, work quality and conditions must improve.

In such a habitat, jobs will be created and the society, as well as the economy, will gain vitality. This is what the liberal parties should work on if they stand for the rights of the working class.