Revisiting labor reforms

The labor sector remains the most stubbornly intransigent and backward area in the Korean economy. In 2004, the government attempted labor reform, when Kim Dae-hwan, the current head of the Economic and Social Development Commission, was serving as labor minister.

The government in September 2004 submitted a bill to enhance job security for nonregular workers during the National Assembly session. The bill was designed to protect the status of nonregular workers as that demographic suddenly surged.

According to the bill, nonregular workers must be guaranteed job security for at least three years. Abuse and discrimination in the workplace due to their nonpermanent status is also prohibited. Restrictions on hiring nonregular workers would be eased, which would ideally help boost flexibility in the job market.

The ruling and opposition parties received an agreement from representatives of labor, management and the government, which said that it would leave the fate of the bill up to the legislature and urged the National Assembly to address the bill as a top priority.

The agreement was signed by the labor minister, the heads of the tripartite committee, the country’s two umbrella trade unions and major corporate organizations. Everything was set. The National Assembly only had to pass it.

But it didn’t. The bill was brushed aside when a few individual labor groups opposed the bill. The veto came from the ruling Uri Party, and three years of negotiations went down the drain. The Uri Party instead called for renegotiations. And when there was no agreement after two and half years, the party unilaterally passed a bill that was far below the initial government proposal.

The labor sector and employers disapproved. And because nothing substantial was done at the time, conditions for irregular workers and within the overall job market worsened.

Kim asked the Uri Party why it sought renegotiations when they were of little avail. He recalled that one party official had said the party was able to obtain the attention of the media that way.

The opposition - then the Grand National Party, which is now the ruling Saenuri Party - was more helpful on the labor agenda. President Park Geun-hye, the opposition leader at the time, and Kim met to discuss cooperation. Park welcomed the labor minister, saying she didn’t know much about the labor sector and wanted to learn. After hearing Kim’s pitch on the reform bill, she responded that there was little reason for opposition and promised to cooperate.

At the same time, Germany was pushing ahead with its own labor agenda known as the Hartz concept. Under this set of reforms, regulations on the nonpermanent work force were eased to make room for part-time jobs and lesser-paying work. The employment rate, at 64.6 percent in 2003 at the beginning of the reforms, rose to 70.2 percent in 2008, even amid the global financial crisis. Sweden followed suit, and the conservative government pursued its own version of labor reforms. The two economies remained intact regardless of the global financial crisis and regional troubles in the eurozone.

The Korean economy shakes at even the slightest external shock, so well-timed labor reforms would make such a difference. Today’s situation is no different from a decade ago. The ruling and opposition parties just changed sides in the legislature, but their lack of responsibility remains the same.

In fact, it has gotten worse. Tripartite talks remain at a stalemate, and yet, the legislature is already warning that it will shoot down any agreement claiming any labor discussions should be done under its supervision.

The Korean economy is slipping further and further into an abyss, and the public has grown weary about the lack of progress on the job front. Politicians must straighten up. They should at least refrain from ruining things so that the tripartite committee can renew talks without any concerns about what their agreement will become when it heads to the legislature. The legislature must exercise bipartisanship in order to revive the national economy.

JoongAng Ilbo, Aug. 24, Page 28

*The author is an editorial writer and senior writer on labor affairs for the JoongAng Ilbo.

by Kim Ki-chan