Return freedom to the labor market

It is common sense that in any endeavor, the difference in results between doing something by voluntary choice and doing it unwillingly out of compulsion is enormous. Is that not why people advise others to “do what you want to do”? When people choose something voluntarily, it motivates them and, in turn, has a major positive impact on their performance. As numerous studies have shown, one of the most fundamental reasons slavery was abolished was that having people work in exchange for wages produced far greater results than forcing them into labor.

And yet, things that run counter to this common sense occur all too often. One such example is the current controversy in Korea’s political sphere over whether to allow an exemption from working-hour regulations in the semiconductor industry amid the global race for AI supremacy, a contest that is even being called a “war.” Countries around the world, led by the United States and China, are making desperate efforts to gain the upper hand in this AI competition. Yet in Korea, while politicians say with their mouths that we must prepare for the AI race, they are doing little more than bickering over whether to exempt the semiconductor industry from the 52-hour workweek rule, rather than pursuing bold, truly groundbreaking policies of the kind seen abroad.

Let us look at foreign cases regarding working hours, especially in this field. According to one news report, for engineers at America’s big tech firms, not only working late into the night but also working on weekends is routine. When asked whether their companies were making them work too much, the response was reportedly: “No one is making me do it—it’s my choice, so what would I have to complain about?” Might one of the reasons American big tech companies are thriving be found precisely in this word: “choice,” the “freedom to choose”? Broad recognition of the freedom to choose in the labor market means, in other words, that the labor market is not rigid but flexible.

Regrettably, Korea’s labor market offers no such individual “freedom to choose”; it is completely rigid. More precisely, we have been deprived of the freedom to choose. Even if a company and its workers have good reason to work more than 52 hours a week and are strongly motivated to do so, they cannot work, and they must not. If they do, they become lawbreakers subject to punishment. No matter how much they want to work hard and achieve high performance, they cannot, and they are not allowed to. That is what the 52-hour workweek regulation has done. In this way, the regulation fundamentally infringes on our freedom to choose. Moreover, it is a highly totalitarian system of thinking, applying a uniform rule across the board while ignoring differences and special characteristics by industry.

That Korea’s labor market is extremely rigid is a conclusion shared by global institutions that assess economic freedom. In this year’s labor freedom rankings published by the Heritage Foundation, Korea ranked 100th out of 184 countries. In other words, in the labor market, individuals have been stripped of almost all freedom to choose, with very little freedom remaining. It has been said for quite some time that labor-market rigidity is the biggest factor undermining the competitiveness of our economy, and that labor-market reform must be carried out without delay.

The core of labor-market reform is none other than returning to individuals the “freedom to choose” that has been taken away from them in the labor market. If comprehensive reform is difficult and will take time, then at the very least, the shackles placed on companies that must compete fiercely in the global AI supremacy race should be removed first.

Hyukchul Kwon (Director of the Free Market Institute; Economics)

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Original title: 노동시장에 자유를 돌려달라

Author: Hyeok-cheol Kwon

Date: 2025-03-13

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=1&idx=27400