By Martin Hart-Landsberg | December 20, 2015
Previously published in Reports from the Economic Front
You wouldn’t know it from reading the mainstream press in the United States, but things are rapidly going from bad to worse for working people in South Korea. South Korea is typically presented as one of America’s strongest democratic allies in Asia and an economic powerhouse. Unfortunately, such a presentation is far from accurate.
South Korea was ruled by US-supported military dictatorships from 1961 until 1987 when, thanks to the heroics of millions of people demonstrating in the streets, the military dictatorship in power at the time was forced to allow the direct election of the president. The country didn’t get its first civilian president until 1993.
Despite having now achieved a regularized electoral process, South Korea’s democracy still remains compromised by the 1948 division of the country. For example, the previous President Lee Myung-bak and the current President Park Geun-hye (the daughter of the first military dictator who ruled from 1961-1979) have repeatedly used the country’s draconian national security law to limit freedom of education and the press, political speech, and the rights of workers and social movement and civic activists.
Park’s own election victory was due, at least in part, to a secret and illegal on-line campaign to tar the opposition as cozy with North Korea which was run by the country’s National Intelligence Service. And in 2014, the government formally dissolved the Unified Progressive Party, removing its five members from the National Assembly using trumped up charges that the party was a North Korean front dedicated to the violent overthrow of the South Korean government.
The democratic labor movement, one of the main pillars of the country’s democracy struggle, was severely weakened by the 1997-98 economic crisis and the IMF -promoted structural adjustment policies that followed. Successive governments, responding to a dramatic slowing of growth due in large part to South Korean corporate decisions to globalize operations, have sought to stimulate domestic investment and production by boosting corporate profits through new measures designed to weaken the country’s labor laws.
Although South Korea already has the largest percentage of precarious workers among all Organization for Economic Cooperation and Development countries, President Park is obviously not satisfied. Hyun Lee and Gregory Elich, two Korea experts, provide the following summary of her proposed new labor reforms:
President Park and her ruling New Frontier party want to introduce a package of laws that would fundamentally change the country’s labor market and undermine the power of unions. They would let employers fire workers arbitrarily, increase the use of temporary labor, and extend the contract term for temporary workers from the current two years to four.
“If the reform passes, an employer could hire workers for four years, fire them temporarily, then rehire them for another four years, and they would have no incentive to hire permanent, regular workers,” [Korean Confederation of Trade Unions (KCTU) President Han Sang-gyun] warned in a recent interview.
Contract workers are not entitled to the four major types of insurance that South Korean employers must legally provide to permanent workers—health insurance, unemployment insurance, industrial-accident compensation, and social security. Unions say employers will use this loophole to replace regular workers with contract workers.
Another proposed law would replace the country’s seniority-based salary system with a performance-based system, and let employers terminate workers based on subjective assessments of “low performance.” (Currently, “low performance” cannot be grounds to fire an employee legally, so employers resort to all manners of harassment and humiliation tactics to force employees to leave their jobs voluntarily.)
Also, if companies want to push workers into early retirement, they are legally required to pay them 30 days or more of average wages for each year of consecutive service as severance pay. This new system “would allow a company to get rid of unwanted workers without spending a dime,” Han said.
The new law would also allow employers to change their employment regulations as they please without worker consent. By law, employers of ten workers or more are required to prepare rules of employment, such as payment method of wages and annual paid-leave, etc., and submit them to the Ministry of Labor, as well as post them where workers can have free access to them. A company can alter its employment regulations only with the explicit consent of the labor union, or, if there is no labor union, the majority of its workers. . . .
The government is also introducing a peak-wage system, in which pay is automatically cut for workers at age 55. The government argues that businesses need to cut the pay of older workers, because they become less productive as they age, and with the money they save, companies can hire more young people and solve the country’s growing youth unemployment. The government is trying to pit the young against the old, but its feigned concern for young people masks the real beneficiaries of the labor reform – companies that stand to reap enormous profits from cutting the wages of older workers and increasing their reliance on temporary labor.
The KCTU is fighting back, and they have allies. The farmer’s movement opposes President Park’s push for new trade agreements that will drive down the price of rice, slash their income, and leave the country ever more food dependent. And most people oppose the government’s proposal to take it upon itself to write the only history textbooks to be used in public schools.
The KCTU has worked to build a coalition of popular movements around a new vision for the country and helped initiate huge demonstrations in Seoul on November 14 and December 5 demanding the resignation of the president. Park, in response, ordered the police to raid the offices of several KCTU unions and unsuccessfully tried to outlaw new demonstrations. She also ordered the arrests of top KCTU leaders. The KCTU president was arrested on December 10. The police are still searching for other union officers. It appears that President Park will charge all of them with sedition, which if true will be first time such a charge has been made since the end of the military dictatorship.
There is a lot at stake in this struggle, one that seems to fly below the radar of the US media. As I noted in a previous post:
With the deepening of corporate-led globalization processes, governments everywhere seek to weaken labor movements and worker protections and restrict options for public education and democratic debate. As a consequence, the KCTU’s efforts to revitalize its own union structures through its first ever direct election for top officers and renewed internal education and anchor a broad coalition of social forces around an alternative social vision deserves widespread support and serious study.
Martin Hart-Landsberg is Professor of Economics at Lewis and Clark College, Portland, Oregon; Adjunct Researcher at the Institute for Social Sciences, Gyeongsang National University, South Korea; and Adjunct Professor in the Labor Studies Program at Simon Fraser University, Canada. He is on the board of the Korea Policy Institute.