Uphold the tripartite consensus
More than three months have passed since a tripartite committee involving government, labor and management representatives reached a deal to reform the labor sector. Starting in 2016, the legal retirement age will be pushed back to 60. The reform guidelines were reached after difficult negotiations to minimize side effects from extending the retirement age and reviving the job market.
The National Assembly is discrediting their work, however, by neglecting the bill, which could further damage the market.
In the second half, Korea’s 30 largest companies increased new hires by 14 percent and investment by 17 percent, with the expectation that the legislature would pass the reform bills. They are now revising their hiring and investment policies for 2016 because of uncertainties in the labor market. The Korea Federation of Employers expects corporate investment to decline next year.
When investment is shaved, jobs will inevitably be reduced. Since hiring for young people increased in the second half, businesses could keep the number to a minimum next year. Companies are instead encouraging their employees to voluntarily retire, so older and younger people now run the risk of being out of a job. Various laws to stimulate the economy were passed, including the free trade agreements with China and the United States, but they failed to stimulate job creation.
Labor relations could also decline due to uncertainties in the market. Labor and management could clash over working hours and use of temporary workers due to incongruous guidelines. The hard-won compromise designed to improve labor relations and conditions could instead work to unsettle the job market.
But the government must not enforce its own set of guidelines on layoffs. It must respect the deal reached between labor and management representatives. Makeshift action could do more harm than good, just like the government-led change in the guidelines for base salary.
The role of the legislature is pivotal. It should not ignore or compromise the work of its citizens. It must also remember that the members of the National Assembly’s environment and labor committee who unilaterally changed the tripartite committee proposal to protect irregular workers in 2004 mostly lost their seats in the parliamentary election. JoongAng Ilbo, Dec. 30, Page 34
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