Korea Labor Reform Seminar 2015 Oct

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Transcript of Korea Labor Reform Seminar 2015 Oct

  • Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Neo-liberalism and Technological Innovation

    ` ` Globalization

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14 (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.commailto:mrhysong@gmail.com

  • Changes Accompanied by Liberalization of Capital Transactions-1

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Changes Accompanied by Liberalization of Capital Transactions-2

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Responses from Globalization

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Responses From Globalization: Legacy

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Growth of Flexible Jobs: OECD EPL Index (1985-2008)

    0

    0.5

    1

    1.5

    2

    2.5

    3

    3.5

    4

    Regular Contracts Temporary Contracts Source OECD

    Continuous deregulation

    of temporary contracts

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Labor Force Participation Rates (2000-2010)

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Unit Labor Costs in International Comparison

    Index OECD base year 2000=100 Seasonal adjusted values (national currency)

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Understanding the targets of reform

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Dual labor market theory

    Two labor markets exist with very different levels of wage and working

    conditions. The two markets rarely exchange manpower, and employment

    and wage are determined on a mutually exclusive basis.

    - 1st labor market :

    Higher wages, greater stability in employment, opportunities for promotion, fringe

    benefits and reasonable procedures are the features of this market, which exists inside

    companies with an internal labor market.

    - 2nd labor market :

    lower wages, less stability in employment, high turnover, fewer fringe benefits, and

    arbitrary labor management are the features of this market.

    How did the 1st labor market come to be?

    - Company-specific skillsets

    - Monopolistic division

    - Insiders and outsiders created by the presence of a labor union.

    Polarization of the labor market

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Dual structure of the Korean labor market

    Regular employees

    (A) 56.82%

    Union-shop (B) 24.99%

    Large companies

    (C) 12.20%

    Irregular employees

    (E) 37.99%

    Regular employees Union-shop

    Large enterprises (D) 7.56%

    National Statistics Office (August 2009)

    Dual labor market structure in Korea

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Vicious Circle of the Dual Labor Market

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Solutions to the Dual Structure

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • How to effectively design labor market policy?

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • What is a work hour system?

    A work hour system refers to an institutionalized system of working hours that are

    regulated according to company, societal and individual goals through regulations,

    standards and laws. Such a system is also influenced by labor market supply and

    demand.

    Working hours & labor productivity

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Long working hours

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Aged Worker & youth unemployment

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Shift in demographics

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • 0

    2

    4

    6

    8

    10

    12

    2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

    Recent Trends : Youth (15~29 age) and Aged (55~64 age)

    Ra

    tio

    (%)

    Year Source : Korea Statistics

    Unemployment Trends by Age Group

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Classification 2008 2013 (%) Increase/ Decrease

    (%)

    Full-time employee 2,339,435 2,183,456 58.3 -155,979 -113.9

    Temporary employee 953,332 1,050,707 28.0 97,375 71.8

    Daily employee 262,672 270,397 7.2 7,725 5.7

    Self-employed, with employee(s) 41,309 38,110 1.0 -3,199 -2.4

    Self-employed, w/o employee(s) 212,565 129,626 3.5 -82,939 -61.1

    Family member with no pay 74,111 75,427 2.0 1,316 1.0

    Total 3,883,423 3,747,723 100.0 -135,700 -100.0

    Source: Statistics Korea (2013)

    Shift in types of youth employment

    Shift in employment status of the youth (ages 15-29)

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Mismatch of Labor Force Supply-Demand

    5~9 10~29 100~299 300~499 500

    N0 Qualified

    Labor force

    36.8%

    High Wage Preference

    35%

    Insufficient Payment

    Capability 10.7%

    etc

    7.8% Imperfect

    Job-offer system

    9.7%

    Korea Employers Federation 10

    20

    30

    40

    50

    60

    70

    2

    3

    4

    5

    S/Rate Shortage

    6

    69

    5.1

    60

    40

    2.35

    28

    2.4

    3 5

    30~99

    (1000) (%)

    7

    1.02

    0.48 1

    3.19

    Labor force Shortage by Business Size Reason for Labor force Shortage

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • Large enterprises

    say:

    SMEs say:

    Job Opportunities: Solutions for inter-generational Conflicts

    Labor Reform in Korea - Outlook & Preparation

    (Maven H. Song) T) 010-2714-1707 36-23 1009 e-mail (mrhysong@gmail.com )

    15.10.14

    mailto:mrhysong@gmail.com

  • General definition Definition of decent part-time

    jobs

    Accor