Taking clients hostageThe Korean Financial Industry Union must back out of a general strike scheduled for Friday. If the union stages the walkout, more than 10,000 banking outlets across the country will be paralyzed. Amid unceasing aftershocks after the 5.8-magnitude earthquake in Gyeongju, North Gyeongsang, last week, the powerful — and aristocratic — labor union’s move leaves us dumbfounded.
If the labor union pushes forward with the strike, which is expected to see almost 100,000 members participate, local banks cannot avoid a colossal crisis befitting an unprecedented “act of terror through a strike.” That’s why Financial Services Commission Chairman Yim Jong-yong held an emergency meeting yesterday with the heads of seven major commercial banks.
If our banking industry suddenly comes to a halt, it could push a great number of small and midsize business owners to the threshold of bankruptcy. Despite convenient services like internet banking and automated services, they have to go to physical branches to draw their savings from maturity or get a loan. In the event of a strike, clients’ complaints will also skyrocket.
The union plans to kick off a strike to thwart the management’s attempt to introduce a performance-based salary system that could mean a 40 percent pay gap between the highest- and lowest-performing employees. So far, our banks have made easy money from giving household loans to customers. But now they face a crisis after the humongous debt amounting to 1,300 trillion won ($1.16 trillion) turns into a ticking time bomb.
Despite a relative decrease in productivity, our banking sector employees receive hefty wages nearly twice those of their American counterparts.
Moreover, if internet banking services start later this year and electronic currencies are used more widely, that bodes badly for the future of banks. If they desire to raise productivity for survival, they must change their salary system to a performance-based one. That’s the only way to avoid massive manpower restructuring and ensure employment security.
Resistance to changes and innovation only leads to demise. Five large-scale commercial banks had to shut down after refusing to revamp themselves. The Global Financial Markets Forum ranked our banking industry’s international competitiveness at a lower level than Ghana’s and Malawi’s.
Dark clouds hang over our economy. A general strike under such circumstances is nothing but self-destruction. We urge the union to get back to business.
JoongAng Ilbo, Sept. 22, Page 34