[Editorial] Labor market flexibility is needed now

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[Editorial] Labor market flexibility is needed now

The Future Labor Research Council, an expert group launched by the government, presented recommendations Tuesday to reform the labor sector of the Korean economy. They are aiming to increase flexibility of our rigid labor market by changing workhours and the pay system. Most noticeable is the group’s advice for a flexible application of the 52-hour workweek. Instead of using the weekly system, it recommended operation of diverse systems based on monthly, quarterly, bimonthly or yearly calculations. In that case, employees can work for an average of 52 hours per week throughout their entire work period without being confined to the weekly limits. Put it simply, workers at an ice cream factory can work more in summer while working less in winter.

The expert group also recommended the government extend the length of work hours employees can choose on their own up to three months from the current one month for the entire industry. (Currently, only employees working in R&D are excluded from the one-month restriction.) The expert group also advised companies to determine their workers’ pay based on their performance, not on the seniority base, along with social discussions on extending the retirement age above 60.

The recommendations were made after consultations with the Yoon Suk-yeol administration. President Yoon said his administration will soon fix its position based on those recommendations and push reforms to protect the socially vulnerable. We welcome the recommendations centered on creating a more flexible labor market, because its rigidity hampered the competitiveness of the economy.

The 52-hour workweek was legislated to relieve workers of their burden from overwork. But the system backfired. Employees at small and mid-sized companies saw their pay decrease due to the restriction on their work hours. Employers also were frustrated because of a lack of manpower even after receiving orders. As a result, many workers had to find a second job after returning home to make up for their decreased income.

Labor unions oppose the recommendations as they will only “lower the quality of employment.” The Federation of Korean Trade Unions criticized them for “helping employers extend work hours.” The Korean Confederation of Trade Unions also attacked the recommendations for “worsening the labor market by allowing employers to use employees for a longer time at low wages.”

What matters is raising labor flexibility while ensuring employees’ rights to health and welfare. We hope the government finds a solution for the labor market pretty soon.
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