Grand compromise is crucial

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Grand compromise is crucial

Published: 10 Jan. 2014, 21:32

Kim Dae-hwan, chairman of the Economic and Social Development Commission, proposed a “grand social compromise” to solve various labor issues. In a New Year’s press conference, the head of the government-led body coordinating dialogue between labor and management said his tripartite committee will try to resolve key issues such as reforming the structure of base salaries, reducing work hours and bolstering social security this year. Instead of addressing one issue at a time, he proposed laying all the problems on the table and seeking a package deal. We welcome the government’s proactive approach to pending labor issues and urge the two major umbrella labor unions to return to the tripartite discussions.

Labor conflicts are directly or indirectly related to all the underlying social problems Korea faces today - a slow-moving economy, an aging society and wealth polarization. If labor relations are not stabilized, no progress can be made on these problems. President Park Geun-hye’s three-year plan for an innovative economy can’t be realized without restoring good labor-management relations. Any reforms or deregulation of public institutions must have the support and cooperation of the unions. Korea cannot make strides in various reforms unless it builds confidence between labor and management, as well as labor and government.

Antagonism must be resolved through a grand compromise. The Dutch overcame their malaise of prolonged economic slowdown and unemployment through the landmark Wassenaar Arrangement in 1982. Unions agreed to restrain wage growth in return for the government reducing working hours and tax rates and employers’ promise to increase hiring. The ground-breaking agreement was reached due to a sense of urgency that both workers and employers could lose everything if they did not compromise. There’s no reason why we, too, cannot come to such an agreement.

The Supreme Court’s ruling on including regular bonuses and allowances in base salaries and the recent, longest-ever rail workers’ strike underscored the need for tripartite compromise. Employers and unions cannot settle disagreements on base salaries, working hours, retirement age, flexible wage systems or work sharing, public companies’ reform and increasing the hiring of women among themselves. Representatives of labor, employers and the government must sit down and endeavor to come up with a compromise.

The labor sector must return to dialogue, and the committee must persuade the two major bodies - the Federation of Korean Trade Unions and the Korean Confederation of Trade Unions - to resume talks. Instead of a knee-jerk rejection, the two umbrella unions must retain a forward-looking attitude to work out problems.

That is in the best interest of both the workers they represent and the Korean economy.