Conglomerates at a crossroads

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Conglomerates at a crossroads

My college friend K. was the gentle type. When student riots were daily events during our college days, he kept to his books in the library. He didn’t pass the high-level government employees’ test, but found a job with little trouble. Jobs were abundant in the late 1980s thanks to the windfall of “the three lows” - low U.S. dollar, low interest rates and low oil prices. Those were the days when college graduates chose which companies to join without even taking an aptitude test.

K. joined a large company. He used to talk about his company with pride when he met up with friends. In 2008, he left the company. He took a job at a smaller company and soon left it for another. We lost track of him after that. After five years, I finally met him again.

K. said he’s running a small diner outside the capital. He has some debts after several unsuccessful ventures. He said he and his wife were just about managing to get by.

His son found a job at a small start-up. Although it’s a staff job, it pays less than a contract position in a bigger company.

K. discovered that the world is a different place - poor, nasty and brutish - outside a secure job at a large company. He claims all the politicians, professors, and even journalists like me don’t really know what we are talking about.

Those elite chatterati say Korea’s companies must do well to create jobs and make the country strong. But in reality, that matters little to people who are alone in the cruel unprotected world like my friend. If large companies do well, the benefits are restricted to the employees within and are shared with no one else.

My friend K. has turned callous after all the things he had been through. I dared not offer any word of comfort. He wouldn’t have accepted them. K. is hardly alone. Over 7.2 million people born in the baby-boom generation of 1955 to 1963 are nearing retirement stage. A second bunch of 6 million born between 1968 and 1974 will follow suit. The world will be a tougher place to live. They face fiercer challenges than my friend K. All of their resentment could be directed at large companies. Young people who are shunned by them direct all their frustration at the big and inaccessible corporate names.

Large companies in the past were regarded highly, contributing to the economy through the national drive for exports. They were truly believed to be helping the country and its people. But those days are gone. Large companies no longer generate jobs. Of our total working force, people on permanent payrolls at large companies make up just 10 percent.

The trickle-down effect on smaller companies exists but it’s been watered down. The discrepancy between large and small companies has widened. If permanent workers at large companies earn, say, 100, salaried workers at smaller companies get 53 and contract employees 36.

Large companies are cornered. They no longer have state protection as national champions. People have turned cold. The Lee Myung-bak government fell out of public favor because it failed to read the changes in mass sentiments. It emphasized pragmatism and was pro-corporation, a campaign that did not win it public support. During the middle of its term, it changed its rallying cry to symbiotic growth, but by then the public was already disillusioned.

Having watched her predecessor’s failure, Park Geun-hye promised economic equality during the 2012 campaign. Her slogan touched a chord in public sentiment. Voters were interested and victory was hers. Anti-chaebol slogans will likely be recycled for the next presidential election in 2017 as they proved popular. Centrism will be the recipe for economic policy. Yoo Seung-min, floor leader of the ruling Saenuri Party, strummed these chords already, saying the party will serve the middle and working class, not the rich and big companies.

But large companies do not seem all that worried. They repeat their overused reasoning. “Companies must survive in order for workers to survive.” “Companies must be able to do good business in order to make jobs.” They even warn us that more companies will go overseas if anti-corporate sentiments worsen at home.

They may not be wrong but they are certainly out of touch with the public. Their arguments come across as excuses to defend their vested interests and their fat life styles. They unabashedly claim their overseas credibility and business orders could be hurt if they face probes over irregularities.

That argument no longer sells. People have seen enough from Keangnam Enterprise’s rise and fall after doing business solely on political connections. What must be going through the mind of my friend K. as he watches the unfolding bribery scandal involving Keangnam’s former head and the political bigwigs who served him up like K. serves up a dish in his diner?

One official from the Federation of Korean Industries, the lobbying group for the country’s largest companies, said there were a lot of things the masses misunderstand about big companies. He criticized the government and politicians for being anti-corporation to win public favor. But outdated reasoning cannot reverse the mounting anti-corporate sentiment. Our society has changed too much.

JoongAng Ilbo, April 20, Page 28

*The author is acting editor-in-chief of the JoongAng Ilbo.

by Koh Hyun-kohn

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