Next Gwangju at hand in MiryangMiryang, South Gyeongsang could be the next to follow the Gwangju job model, a system in which wages are kept low in order to improve industrial competitiveness.
Yet unlike Gwangju or other local governments, which have worked with conglomerates to establish production, Miryang is focused on smaller companies to boost jobs and the regional economy.
The Ministry of Trade, Industry and Energy on Monday said a new type of coexistence job project is near completion in Miryang.
“[The local government] invited local residents to convince them that smart factories will solve environmental problems,” said Park Keon-su, head of the ministry’s office of industry and enterprise innovation. “Such efforts represent a new type of coexistence job plan different from the Gwangju job model.”
The South Gyeongsang government in a separate press release said the Miryang government will work closely to reach an agreement between the four parties - companies, labor unions, regional residents and the government - by the end of the month.
The foundation of the new job agreement is relocating 30 so-called root industry companies scattered around Changwon, Jinhae, Gimhae and Busan, all in South Gyeongsang, to a cluster at an industrial complex in Miryang.
Root industries refer to those that are involved in foundation endeavors, such as casting, molding and welding.
The South Gyeongsang government said by creating a smart factory within the industrial complex it will not only improve productivity but also reduce pollution.
With 350 billion won ($295.2 million) in investment by 2024, the local government expects 500 new jobs to be created. Over 1,700 are employed at the 30 companies.
According to the Industry Ministry, these companies have been trying to relocate to the industrial complex since 2006 but failed to because of protests by the local residents who were concerned over the possibility of environmental damage.
“The biggest obstacle has been the opposition by the Miryang residents,” Park said. “But there has been progress in reaching an agreement, as the companies have agreed not only to contribute to the regional society but also to provide benefits, such as hiring local residents first.”
Park said if the agreement in Miryang is reached, the central bank will review it and look into its own contribution.
At the end of January this year, the Gwangju government was able to reach an agreement with labor unions with the support of the public in creating a joint company with Hyundai Motor to establish an automotive plant that would employee locals at wages less than those usually paid by Hyundai Motor and Kia Motors.
Despite strong protests from the automaker’s labor union, the plan drew praise from the government, as it not only contributes to creating jobs for local residents but also reduces the automaker’s labor costs.
The lack of wages is balanced by government benefits, including welfare support and infrastructure projects. The Moon Jae-in government said it will announce two or more models similar to the Gwangju.
BY LEE HO-JEONG [email@example.com]