An elusive ‘European dream’The outstanding strength of President Park Geun-hye is simplifying a goal and pushing it forward with consistency. The administration’s top priority, a 70 percent overall employment rate, is a good example. For the past decade, the employment rate has remained at 64 percent and Park wants to raise it to 70 percent by the end of her term in 2017.
All ministries presented various programs and the key is reducing the average annual work hours from 2,029 this year to 1,900, creating 930,000 part-time jobs in five years. As growth alone cannot generate new jobs, the government plans to change the paradigm of labor by decreasing the work hours while sharing more jobs. The government also presented an ambitious goal to reduce the annual work hours to less than 1,800 by 2020, the average for OECD member nations.
Hidden behind the numbers is an interesting key phrase: “European dream.” The idea of changing Korea’s workplace reality - that its workers work the longest hours among OECD members - and accomplish the European Union’s goal of a 70 percent employment rate has its basis in European countries. Park actually studied in France when she was young, and perhaps that is part of it.
She seems to agree with the argument of American social theorist Jeremy Rifkin that the “European dream,” which values the quality of life over wealth, is the best effort for the future of mankind.
In fact, Park was keeping in mind the examples of two European countries - the Netherlands and Germany - which accomplished their 70 percent overall employment rates by increasing the figure by 5 percentage points each through a grand social compromise. Park visited the Netherlands in 2011 as a special envoy of then-President Lee Myung-bak and she was deeply inspired by the country’s case.
In 1982, the Netherlands managed to forge the Wassenaar Agreement on employers, labor unions and the government. It dictated that wages would be restrained while companies would cut work hours by 5 percent and increase jobs. With the groundbreaking agreement, the country, which suffered from minus growth and a double-digit unemployment rate, emerged as a small yet strong economic powerhouse in Europe.
When Korea cuts its work hours as promised by Park and creates 2.38 million new jobs for the next five years, the quality of life and the happiness of the people will improve.
But the problem is that the plan has very low feasibility if the situation in our companies remains unchanged. There is no trust between employers and unions. It is only possible to achieve the goal when the labor unions agree to cut work hours while companies increase high quality jobs, but both remain passive. Also, we don’t see a strong political leadership persuading both parties.
A 70 percent overall employment rate is a sweet temptation, but persuading employers and unions is a difficult task to risk someone’s political career on. If the president cannot do it personally, the prime minister or the deputy prime minister for economic affairs should do his best. But we don’t see such efforts.
The Korean Confederation of Trade Unions, led by the unions of conglomerates, is sitting with folded arms instead of participating in the trilateral committee meeting among the unions, employers and the government. Moreover, no one tried to persuade the hard-line umbrella union to join the crusade.
Let’s go back in time to the Netherlands in 1982. The leader was Prime Minister Ruud Lubbers. The 43-year-old center-right politician defined skyrocketing inflation and stagnant economic growth as the Dutch Disease and cut the wages of civil servants to set an example.
He declared that the government would intervene if the unions and companies did not compromise. Two days later, the head of the employers’ association invited the chief of the umbrella union to his house for a negotiation. The unions agreed to cut wages while companies agreed to cut weekly work hours from 40 to 38 and to hire more people. That was the moment when the Wassenaar Agreement, which started the so-called Dutch Miracle, was born.
The leadership of Korea is far different from that of the Netherlands 31 years ago. The Park administration appears to have no determination to assess the current situation as a crisis and stake its fate on it. In fact, Park is reluctant to have a frank talk with the labor community given memories of her father, Park Chung Hee, who had difficulty with unions resisting his strongman rule.
For the people, however, Park must overcome her personal trauma, and that’s the kind of decision true to Park’s nature. Before stepping into the paradise of the 70 percent employment rate, the government must go through the tough world of talking to the unions.
After all, a “European dream” doesn’t come true all by itself.
*The author is a senior editorial writer of the JoongAng Ilbo.
BY Lee Ha-kyung