A half-baked reform
A government-sponsored body representing labor and management has reached an agreement to work toward labor market reform. Members of the Economic and Social Development Commission, which is comprised of economy-related government offices, the Korea Employers Federation and the Federation of Korean Trade Unions drew up a tentative five-point agenda with 14 action plans. The government sees next year as a crucial year to reinvigorate the Korean economy, which has been in slow motion for many years. Overhauling the labor market is one of the four areas of structural reform eyed by the government. But no action is possible without the support of labor and management.
Although it is a much-awaited compromise from the labor and management sector, the outline leaves much to be desired. The three sides made little progress beyond agreeing that the rigid labor market requires structural change. They sidestepped sensitive and key issues through equivocal rhetoric. The labor market has become increasingly unstable and polarized due to widening disparity between the permanent and irregular work force. Instead of aiming to break rigidity in the labor market, they agreed to work toward improving mobility in the working field. Without a specific target, a final agreement may be difficult to reach or could be limited or wan even if it does have an effect.
But it is premature to be pessimistic. The fact that they have begun discussing reform and are standing on the same front is a huge improvement and a hopeful sign. The details and goals could be laid out and shaped through dialogue. But they must all be willing to address thorny issues. They must work with the mind-set that they cannot make an omelette without breaking the eggs. The process could be bumpy and even messy. But they must not waste the hard-won momentum by feigning efforts and dithering. They must work toward a specific target and outcome. Without sharing the pain and yielding from all sides, labor market reform cannot be possible. And without labor reform, sustainable growth in the Korean economy could be in jeopardy. JoongAng Ilbo, Dec. 26, Page 34