Confidence neededThe government and ruling Saenuri Party have singled out labor reform as the nation’s top priority. Kim Moo-sung, chairman of the ruling party, vowed to push forward reforms even at the risk of losing votes in the general election next year and the presidential election in 2017. That follows an earlier pledge to use political capital for labor reforms. On Thursday, President Park Geun-hye urged the Saenuri leadership to take Korea ahead economically through reforms.
Korea’s economy is in an anemic state. The plunge of its growth below 3 percent has pushed the economy into a lethargic condition despite the government’s aggressive fiscal stimuli and lowering of interest rates. At the core of the problem are labor practices. As the polarization of wealth deepens, wages for non-salaried contract workers were only 48.4 percent of what their salaried counterparts earned last year. Discrimination in promotions got worse, not to mention the alarming level of jobless among the young. College students even staged a protest in front of the Korean Confederation of Trade Unions (KCTU) to demand companies share jobs with them.
The head of the ruling party is determined to launch labor reforms, but stopped short of actually fulfilling public expectations. The government has nearly given up on efforts to resume talks with unions since they left a tripartite committee comprized of unions, representatives of employers and government. The government has been dragging its feet for two months on whether to accept Kim Dae-hwan’s resignation as chairman of the committee. As a result, the committee’s proposals for a peak wage system by the end of June and new guidelines for employment by August are being delayed. In the meantime, the unemployment rate for the young soared to 10.2 percent, the highest since 1999.
Yet the Federation of Korean Trade Unions and the KCTU - two umbrella groups representing labor - vehemently resist the government’s labor reforms. Both the government and ruling party must find a breakthrough by presenting feasible ideas for sharing the pain with the corporate sector. Labor reform starts with surrendering vested interests. Unless they approach it proactively, they cannot cut through the Gordian Knot. The government and Saenuri Party must demonstrate leadership on a grand compromise.
That calls for presidential leadership. Park must convince committee members to share the burden and listen to the voices of labor and management after inviting them to the Blue House. The president and Chairman Kim must press ahead for the labor reforms with confidence.
JoongAng Ilbo, July 22, Page 30