Realistic solutions firstThe four mainstream parties agreed in principle to reduce maximum weekly working hours from current 68 hours to 52 hours from next year. Weekly work hour cuts by up to 16 hours demands a radical change in the production system and a spike in labor costs for demanding work beyond the legal threshold. According to the Korea Economic Research Institute, labor costs for employers will increase by 12.3 trillion won ($11 billion) a year from getting necessary work from elsewhere and covering extra costs due to reduced work hours.
The burden would become heavier for small and mid-sized enterprises where 88 percent of the country’s work force gets their salaries. Small and mid-sized companies are mostly labor-intensive and therefore would have to find replacements if their permanent employees work less. The companies that cannot match large or public enterprises in pay and work conditions would lose competitiveness.
When the parties meet again this week, they must consider this reality in the manufacturing field. Otherwise, they will cause damage to the business sector as their rubber-stamping on extending the retirement age to 60 had done in 2013.
The National Assembly caused a serious labor-management conflict by passing controversial bills including the peak wage system without thorough study.
The plan of improving working conditions must not bring about side effects. Koreans work an average 2,113 hours a year, far greater than the 1,766-hour average of other member countries of the Organization for Economic Cooperation and Development. Koreans work two months more than most people in the world. The trade unions oppose any changes to the working system as overtime and weekend labor brings higher pay.
Labor reform is inevitable. Shorter work hours will create bigger job opportunities and help to ease youth unemployment. The legislature should place an exception clause on certain industries that require customary overtime and customize the timetables for the new working hours for each industry so that the new conditions to make new jobs and increase productivity do not hurt employers.
JoongAng Ilbo, March 22, Page 30