Mayor rejects merit-based pay

The subway lines in Seoul returned to normal business after workers ended their joint walkout with the upper Korean Railway Workers’ Union in protest of the government-led merit-based salary system. They ended their strike because five public service operators under the Seoul municipal government decided not to comply with the government order to fully employ the new salary guidelines based on employees’ performance reviews instead of tenure.

The new system was demanded by 119 public institutions and 143 enterprises under local governments as a part of a labor reform plan. The administration held talks with the five institutions under its umbrella and promised not to employ the new pay system until the labor union agreed to it. The five institutions are Seoul Metro, Seoul Metropolitan Rapid Transit, city housing and land developer SH Corp., Seoul Agro-Fisheries & Food Corp. and Seoul Metropolitan Facilities Management Corp.

The conditions laid out by Seoul are more or less a declaration of non compliance with the government plan on pay. The union that vehemently protested the new salary plan won’t likely endorse it later on and could have repercussions on other institutions. The government warned that it will disadvantage the city if it does not comply with the pay system by freezing the labor budget, but the city administration held firm. The government has been pushing an overhaul because the long-held system that allows base salaries to rise according to seniority hampers hiring and eats up competitiveness.

Seoul Mayor Park Won-soon would have to be fully responsible if enterprises under the city end up excluded from reform. Park is siding with the union saying introducing the system without establishing fair and clear criteria for new salary bases could only worsen conflict. In May, he proposed to include employee representatives on the managing boards of 15 institutions. He is now outright going against a government system.

It is no wonder the mayor is accused of being a populist politician.

The dissident-turned mayor has been in conflict with the central government many times. He clashed with the government over offering allowances for young jobseekers and the Yongsan Park development plan. If he really has eyes on the next presidency, he should reform public enterprises first and find jobs for young people instead of advocating for a union that is entirely engrossed with protecting its vested interests.

Park must stake his job to the new pay system.