Give Freedom Back to the Labor Market

It is common knowledge that there is an enormous difference in outcomes between doing something voluntarily by one’s own choice and doing it reluctantly out of necessity. This is precisely why people are advised to “do what you want to do”: when a task is chosen voluntarily, motivation follows, and that motivation has a powerful positive effect on performance. As numerous studies have shown, one of the most fundamental reasons for the abolition of slavery was that work performed in exchange for wages produced far greater results than labor coerced through force.

Yet, situations that defy this basic common sense are not uncommon. One such case is the ongoing debate within Korea’s political circles—amid what is often described as a global “war” for AI supremacy—over whether to grant exemptions from working-hour regulations in the semiconductor industry. Countries around the world, led by the United States and China, are exerting all-out efforts to gain an advantage in the AI race. And yet, in Korea, while politicians verbally stress the need to prepare for AI competition, they cannot even agree on something as basic as whether to allow exceptions to the 52-hour workweek in the semiconductor sector, let alone introduce bold, transformative policies comparable to those seen abroad.

Consider foreign examples, particularly with regard to working hours in this field. According to reports from a news outlet, engineers at U.S. big-tech companies regularly work overtime and even on weekends. When asked whether their companies demand excessive work, their response was reportedly, “No one is forcing us—this is our choice. What is there to complain about?” Perhaps one of the reasons U.S. big-tech firms continue to thrive lies precisely in this notion of “choice,” or the “freedom to choose.” Broad recognition of the freedom to choose in the labor market means that the labor market itself is flexible rather than rigid.

Regrettably, Korea’s labor market offers no such freedom of choice; it is thoroughly rigid. More precisely, that freedom has been taken away. Even if companies and workers have clear reasons and strong motivation to work beyond 52 hours per week, they are neither allowed to do so nor permitted to try. If they do, they become lawbreakers subject to punishment. No matter how strongly one wishes to work harder or achieve higher performance, it is both impossible and prohibited. This is precisely what the 52-hour workweek regulation does: it fundamentally infringes upon our freedom to choose. Moreover, the regulation is highly totalitarian in conception, as it is imposed uniformly while ignoring differences among industries and their unique characteristics.

That Korea’s labor market is extremely rigid is a conclusion shared by global institutions that assess economic freedom. According to this year’s labor freedom ranking published by the U.S.-based Heritage Foundation, Korea ranks 100th out of 184 countries. This indicates that individuals in Korea have been stripped of most of their freedom of choice in the labor market, with very little remaining. For quite some time now, it has been widely acknowledged that labor market rigidity is one of the greatest obstacles to Korea’s economic competitiveness, and that labor market reform must be undertaken without delay.

At the core of labor market reform lies a simple principle: restoring to individuals the freedom of choice that has been taken from them. If comprehensive reform is difficult and time-consuming, then at the very least, the shackles placed on companies that must compete fiercely in the global AI race should be removed first.

Kwon Hyuk-cheol
Director, Free Market Research Institute / Economist

Korean version: https://www.cfe.org/20250313_27400