A vision takes shape
The author is the chief editor of the JoongAng Ilbo.
Labor unions exist on the premise that they care for other people’s pain. When they forget the grander cause of protecting the weak in our society and concentrate on their own gains, their legitimacy disappears. When that occurs, they simply end up being vested interest groups. That is not justice. As such, we must ask ourselves: are the labor unions in Korea ethical groups or selfish gangs?
Low wages and long working hours were rampant during Korea’s rapid industrialization and we suffered from them severely. In 1970, Jeon Tae-il, a 23-year-old tailor at the Seoul Peace Market, sacrificed himself by committing suicide. “Enforce the labor law. We are not machines!” he yelled after setting himself on fire. His sacrifice awoke the people’s conscience. Elite university students gave up their safe futures and joined the workers in protest. It was not a coincidence that wages went up and working conditions improved after the massive labor movement of 1987. The starting point of Korea’s labor movement was selflessness.
The Korean Confederation of Trade Unions (KCTU), mainly formed by regular workers of major companies, is ignoring the suffering of contract workers, subcontractors and 15 million workers who are not their members. That is far from altruism. Due to its factional conflicts, the umbrella union has yet to decide whether it will join the Economic, Social and Labor Council, a presidential organ for social dialogue. It stubbornly opposes a flexible work system that was introduced to ameliorate problems with the government’s 52 hour workweek, warning that it will kick off a nationwide general strike on Wednesday. But who is it working for?
Distrust in the KCTU is about to reach a critical point. If it continues to oppose the new concept dubbed “Gwangju-style employment,” it will deny its own identity as a labor union. Gwangju-style employment is a project to build a car factory capable of producing 100,000 units a year, and employ 1,000 workers who will receive annual salaries that are what current auto factory workers get. The project could create and additional 11,000 jobs related to the factory. The central government and city government of Gwangju will cooperate to offer housing, education, medical and childcare programs to workers in order to make up for their reduced wages.
The project is a windfall for the youngsters of Gwangju who have no stable jobs and Hyundai Motor and Kia Motors, whose competitiveness is rapidly falling due to their high wages. And yet, the umbrella union is protesting the project. The average annual salary of a worker at Hyundai Motor or Kia Motors is 94 million won ($83,186). They worry that their wages will be cut when similar jobs with salaries of 40 million won are created. Therefore, they are vehemently opposing the project. This is the same as fathers objecting to employment for their sons and daughters. Is this fair?
A worker at a subcontractor to Hyundai or Kia gets an annual salary of 49 million won. The annual salary of a worker of a subcontractor’s subcontractor is 33 million won, and a contract worker at the motor companies’ subcontractors receives 23 million won. Salaried workers at the two motor companies are getting salaries about four times higher than that of the contract worker at a subcontractor. The Gwangju model can destroy this modern day caste system and give the same wages to all workers. As long as their unions agree, the concept of equal pay for equal work will be realized.
The average annual salary at Korea’s five automakers was 90.72 million won last year, while that of global automakers such as Volkswagen and Toyota is about 84 million won. That’s not all. It takes Korean car builders an average of 26.8 hours to build a car, while it only takes Renault 16.2 hours. The high cost and low efficiency in Korea are the result of militant labor unions’ annual strikes.
The Hyundai-Kia automotive group’s last investment in a factory in Korea was in Asan in 1996. Since then, it built 19 factories in China, India, South America and the United States and created 50,700 jobs.
The Gwangju project is modeled after the success of the Auto 5000 of Volkswagen in Germany. In 2002, Volkswagen planned to open a new factory in Eastern Europe due to Germany’s high wages. It changed its mind and proposed to the labor union that it would offer the jobs if workers accepted 80 percent of their current salaries. After the union rejected the plan, citing the principle of equal pay for equal work, Chancellor Gerhard Schröder stepped in.
He invited labor union leaders and Volkswagen executives to a birthday party for Peter Hartz, the human resources executive of the company. He persuaded the union that not just the employer, but the union also needed to take responsibility to lower the unemployment rate. After the deal was struck, 5,000 unemployed found jobs that year, making Auto 5000 a success.
If the Gwangju-style employment project succeeds, other companies also will build factories in Korea. Youngsters will be able to find jobs. The 13,000 skilled workers from the now-closed Gunsan plant of GM also can start working again at a facility capable of producing 300,000 cars.
Just like Schröder, a liberal politician who persuaded the union, it would be desirable for President Moon Jae-in, who was a liberal, human and labor rights lawyer, to strike a deal with the KCTU. He must urge the confederation to concede to guarantee jobs to their sons and daughters.
JoongAng Ilbo, Nov. 19, Page 31