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
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
15.10.14

Changes Accompanied by Liberalization of Capital Transactions-2
15.10.14

Responses from Globalization
15.10.14

Responses From Globalization: Legacy
15.10.14

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
15.10.14

Labor Force Participation Rates (2000-2010)
15.10.14

Unit Labor Costs in International Comparison
Index OECD base year 2000=100 Seasonal adjusted values (national currency)
15.10.14

Understanding the targets of reform
15.10.14

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
15.10.14

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
15.10.14

Vicious Circle of the Dual Labor Market
15.10.14

Solutions to the Dual Structure
15.10.14

How to effectively design labor market policy?
15.10.14

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
15.10.14

Long working hours
15.10.14

15.10.14

Aged Worker & youth unemployment
15.10.14

Shift in demographics
15.10.14

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
15.10.14

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)
15.10.14

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
15.10.14

Large enterprises
say:
SMEs say:
Job Opportunities: Solutions for inter-generational Conflicts
15.10.14

General definition Definition of decent part-time
jobs
Accor

Korea Labor Reform Seminar 2015 Oct

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