Labor Reform Must Succeed to Create More Jobs

The Yoon Suk Yeol administration has pledged to pursue labor reform. It is welcome news that the government and the ruling party recognize the need for labor reform and have shown a willingness to act. If the reform succeeds, it is expected to create more jobs and restore vitality to the economy.

The most urgent task facing our society is labor reform. Compared with other sectors, the damage caused in this area is the most severe, while the benefits of reform are the greatest. In the labor sector, all kinds of regulations have accumulated to a serious degree. Regulations on employment, wages, and working conditions are so severe, and layered in duplicate and triplicate, that they have stifled the business economy. It has become nearly impossible for workers and employers to freely enter into contracts with peace of mind. Even when contracts are made, they are often undermined by the power and violence of the Korean Confederation of Trade Unions (KCTU). As a result, uncertainty surrounding economic activity has increased, and jobs have been suppressed.

The core of labor reform is deregulation. The key is to remove regulations so that workers and business owners can cooperate freely with one another, creating jobs and earning income in the process. The government appears likely to review priority tasks, including partially easing excessive regulations on working hours.

In particular, the Ministry of Employment and Labor must take the lead actively in labor reform. It must not rely on announcements by outside institutions for policy tasks it should be presenting itself, nor pretend to carry out discussed policy tasks as though doing so reluctantly. Until now, the Ministry of Employment and Labor has neglected regulations that reduce employment and worsen workers’ working conditions. It should reflect on its failure to do its duty for the public and workers, and now actively push forward regulatory reform in the labor sector. It must produce results.

The policy direction must shift away from pro-union policies toward pro-labor policies. The National Assembly must stop legislating for the benefit of the KCTU and begin dismantling its excessive privileges. As bills providing excessive protection and support for the KCTU have piled up, the KCTU has come to reign as a political organization wielding unchecked power and throwing its weight around under borrowed authority. If things do not suit its taste, it acts as though it will paralyze the government. Its use of rolling strikes and planned strikes for political purposes is something unseen in democratic societies of advanced countries.

The KCTU’s excessive privileges must now be dismantled. Violence and illegal strikes must not be tolerated. The reason the KCTU is able to commit illegal acts is that the law blocks the use of replacement workers during strikes. Resolving this is one of the most important tasks for protecting our economic front lines.

The 21st National Assembly has existed for the KCTU. As laws have been made to expand and elevate its privileges, the KCTU’s power and organizational strength have continued to grow. Even members of the National Assembly are afraid of falling out of favor with the KCTU. In effect, politics for the KCTU and by the KCTU is being carried out. On top of that, the National Assembly is pushing the so-called Yellow Envelope Act (Revised Labor Commission Act), which would block anyone from seeking damages from the KCTU even when it commits illegal acts. In the name of the KCTU, it is turning away from protecting the people’s lives and property rights and seeking to undermine the rule of law.

A chain of strike offensives is continuing, and in the spring of 2023, the KCTU’s general strike appears likely to engulf industrial sites across the economy. A situation is being foreshadowed in which industrial sites are taken hostage for political power. It is wrong to turn the right to strike into a source of power for political struggle.

Reducing the privileges of unions that have distorted labor sites is something done for all workers. The greater the power of privileged unions, the fewer quality jobs have been created, and the worse the treatment of non-regular workers has become. To address this, the privileges of aristocratic unions must be reduced. In particular, this will also have the effect of providing jobs to people who want to work but have not had the opportunity to do so.

Labor reform will, through deregulation, create a better environment for workers to work, increase stable jobs, raise productivity, and boost incomes. It will also bring stability to labor-management relations at production sites and lead to outcomes in which the rule of law is realized.

Sung-no Choi, President of the Center for Free Enterprise (CFE)

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Original title: 노동개혁 성공해야 일자리 늘어난다

Author: Sung-no Choi

Date: 2022-12-21

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=25224