Olive branch extended as bus strike threatened

From left, Ryu Keun-joong, head of the Korean Automobile & Transport Workers’ Federation, Finance Minister Hong Nam-ki and Federation of Korean Trade Unions head Kim Joo-young discuss the strike of bus drivers set for tomorrow, in a meeting held in Seoul on Monday. [YONHAP]

The government on Monday proposed relaxing conditions for financial support to bus companies hiring additional bus drivers, a last ditch effort to stop the strike scheduled for tomorrow.

The measures were released after Finance Minister Hong Nam-ki met with union leaders ahead of a looming bus driver strike earlier in the day.

He is the first Moon Jae-in government minister to meet with labor representatives to resolve what could be the worst transportation crisis in years.

The Ministry of Economy and Finance said while the government in principle will not subsidize the bus companies directly, it will ease the conditions for a Labor Ministry employment fund.

The government last year introduced a fund that provides 400,000 won ($337) for every new hire at bus companies with more than 500 employees. That fund is provided only for a year. The government said it is willing to extend that period to two years

While it did not go into details, it said it will help local governments maintain bus routes that become unprofitable as labor costs rise.

Bus drivers in nine areas, including Seoul, Gyeonggi and Busan, have voted to go on strike.

During the closed-door meeting, Finance Minister Hong promised representatives of the Korea Automobile & Transport Workers’ Federation and the Federation of Korean Trade Unions that the government will review what it can to strengthen the “public interest” aspect of bus transportation.

But the finance minister did not promise any support from the central government and told the union representatives that the optimal solution to the current situation is for the local governments to raise bus fares, a sentiment long expressed by top officials in the Moon government.

“Finance Minister Hong said regardless of the recent controversy, now is the time to adjust intracity bus fares,” said Ryu Keun-joong, head of the Korea Automobile & Transport Workers’ Federation. Bus fares are generally increased every four years, and fares in Seoul and Gyeonggi have been frozen since 2015.

“He said it is right for the local government to be in charge since the bus licensing jurisdiction was transferred to local governments” in 2004, Ryu said, suggesting that the central government has no plans of getting directly involved.

The Seoul Metropolitan Government on Monday in a press briefing promised to do its best to prevent the strike from happening tomorrow, but it still opposed to raising the bus fares.

“There’s a possibility for Gyeonggi to raise its bus fares,” said Kim Eui-seung, a Seoul government spokesman. “But [Seoul] will raise the bus fares when there is a reason to do so.”

Other local governments have also been resisting the central government’s call to raise bus fares.

Unless an agreement is reached, 32,300 unionized bus drivers from 193 companies will be walking away from 17,900 buses, including 7,400 in Seoul tomorrow.

That’s 40 percent of the 45,000 buses in the country.

Critics and industry experts have argued that the bus driver strike was expected because the government announced last year the implementation of the 52-hour workweek for public bus drivers from July this year.

With shorter shifts, bus companies have no other choice but to hire additional drivers, which would increase labor costs. Bus driver wages will be dropping by about a third.

The Korea Automobile & Transport Workers’ Federation said, under the shorter workweek, bus companies need to hire an additional 7,600 drivers by July 1, and by the end of this year, they will need a total of 15,000 new drivers.

In the case of Gyeonggi, which needs to hire an additional 5,000 drivers, only 1,200 have been added so far this year. It is estimated that it would cost an additional 730 billion won ($615.9 million) to hire 15,000 drivers.

The union estimates that under the shorter workweek, existing bus drivers could take home 1 million won to 1.5 million won less each month as a result of the loss of overtime. On average, bus drivers make about 3.64 million won per month.

The Moon government has claimed that there’s a limit to what the central government can do to solve the crisis and that the local governments must raise the bus fares.

The Ministry of Land, Infrastructure and Transport last week said in the case of Gyeonggi, the additional burden in hiring new drivers will be solved when the local government raises its bus fares by 200 won.

The Transportation Ministry calculated that a 100 won increase would generate an additional 125 billion won in Gyeonggi, while 200 won increase will add 250 billion won.

“The government has been preparing [for the implementation of the 52-hour workweek], but there are difficulties as it is in a transition period,” said Transport Minister Kim Hyun-mee in an emergency meeting with Employment and Labor Minister Lee Jae-Kap on Sunday.

“Additional financial resources are needed to solve the problem on hiring additional bus drivers. The local governments responsible for the bus routes must be in charge.”

She then stressed that buses should not be halted for any reason.

Local governments have been reluctant to raise the bus fares, especially in Gyeonggi, as a strong backlash from residents is likely considering that Seoul has no plans to raise its fares.

Despite having no plans to support the local governments, the central government has stressed the importance of implementing the 52-hour workweek, not only for reasons of safety but also to help the Moon government’s income-led growth policy.

“Safety is the most important factor on buses,” Transportation Minister Kim said.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]