Working hard is hardly working

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Working hard is hardly working

While small businesses, particularly those owned by individuals, are fretting over the administration’s push to increase the country’s minimum wage, another labor policy is adding to their worries: a reduction in the maximum number of hours one can work in a week.

The issue resurfaced when President Moon Jae-in, during a meeting with senior staff members on Monday, urged the National Assembly to pass a bill reducing the number of work hours in a week.

“A society that takes long work hours and overtime as granted should no longer continue,” Moon said during the meeting. “The labor reform bill that has been sitting in the National Assembly should absolutely pass since there has been enough discussion [on the issue] since the 18th National Assembly [in 2008].”

With Korea recording one of the highest numbers of work hours among members of the OECD, the burden is leading to major tragedies, the president said, pointing to a recent case where a bus driver crashed into a vehicle while asleep at the wheel due to exhaustion.

The Moon administration wants to reduce the maximum number of work hours allowed from the current 68 hours per week to 52 hours. If the bill passes, business owners that violate the rule could face up to two years in prison or a maximum fine of 10 million won ($8,800).

Long work hours have been a perennial issue in Korea, with many workers committing suicide due to overwork. According to the OECD, Koreans spent the most time at work after Mexicans. In its report released in August, Korean spent 2,069 hours on average working last year. That’s 305 hours more than the OECD average of 1,764 hours. When breaking it down by eight-hour workdays, Koreans on average worked 38 days more than the OECD average.

Last month, an employee in the Seoul Metropolitan Government’s budget office committed suicide after taking on an overwhelming workload. Across 26 days in August, the 28-year-old employee, who started working at City Hall in 2015, had worked an additional 170 hours than allowed, according to the city government. Even on the last week of that month, he worked until 2 a.m. on both Saturday and Sunday.

The business community is opposed to the reduction, with the Korea Economic Research Institute estimating additional labor costs of 12.3 trillion won. The burden on small and medium-sized businesses could be heavier than at conglomerates, the private think tank said, as they would account for the majority of the additional financial burden at 70 percent or 8.6 trillion won. The costs include hiring and training additional staff and providing welfare.

The institute noted in particular that 22 percent of the additional costs will be taken on by the smallest businesses, such as restaurants and cafes, which have only a handful of workers.

Employees are expected to feel the impact as well, with workers expected to see an average 12.7 percent drop in their monthly salary from the reduced hours.

The government push comes at a time when small businesses are already worried about increases in the minimum wage.

Next year, the government is set to raise the minimum wage by 16.4 percent, the sharpest increase since 2001, to 7,530 won an hour. The increase alone is expected to incur additional costs of 15.2 trillion won.

Despite opposition from the business community, President Moon has remained steadfast in his push for labor reform, hoping that it will not only improve working conditions at small businesses like restaurants, cafes and convenience stores, but also result in additional hiring.

“There are no other countries in the world with an employment rate above 70 percent where the annual working hours exceed 1,800 hours,” Moon said. “By sharing the work through reduced hours, we can significantly improve the employment rate and the overall quality of people’s lives.”

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