This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• Gyeonggi Province Governor Lee Jae-myung and former conservative politician Yoo Seung-min exchanged barbs on social media over whether the incumbent administration has given up on economic issues.
• This comes as controversy mounts over the lack of public relief for delivery workers who are being overworked by the retail industry.
• The government’s failure to halt runaway housing prices continues to receive heightened attention, prompting policymakers to consider rolling back property taxes.

Implications: Despite concerns ranging from the ongoing pandemic to Pyongyang’s diplomatic intransigence, economic issues dominate the political discourse in South Korea. Housing unaffordability elicited the most scrutiny. Notably, a majority of survey respondents in their 20s and 30s – a cohort that strongly supported President Moon Jae-in in the 2017 election – expressed dissatisfaction with the government’s efforts to rein in real estate prices. Simultaneously, the government has not satisfactorily addressed concerns of marginalized workers who are overworked and underprotected by the current system. In this environment, the social media exchange between Governor Lee Jae-myung and Yoo Seung-min may foreshadow the central debate in the upcoming 2022 presidential election.

Context: The focus on bread and butter issues marks a shift in political discourse since President Moon began his term in 2017. The previous election came on the heels of popular protests against the previous administration’s corruption. Engagement with North Korea also loomed large in the first two years of President Moon’s term as Pyongyang first escalated tensions and then made peace overtures. As late as Spring 2020, the nation’s focus was on the pandemic – with the electorate rewarding the ruling party with a near-supermajority on the merits of the government’s handling of the COVID outbreak. Nonetheless, scrutiny from both the public and opposition parties are now focused on the government’s handling of the economy.

Korea View was edited by Yong Kwon with the help of Sophie Joo, Sonia Kim, and Chris Lee.

Picture from the user Republic of Korea on Flickr 

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• A Seoul court recently upheld bans on rallies of more than 10 people in an effort to contain the COVID-19 outbreak.
• Meanwhile, seven parcel delivery workers have died so-far in 2020 from overwork, as the coronavirus outbreak led to a sharp surge in the parcel delivery demand.
• In August, 2,000 people attended a rally organized by the Korean Confederation of Trade Unions (KCTU) to protest current working conditions.

Implications: The South Korean government’s strict adherence to social distancing might stymie efforts by key stakeholders and civic actors to improve public health. For instance, the KCTU claims that many delivery companies have not invested in sufficient preventative measures to safeguard their employees from COVID-19. In addition, other labor advocates point out that there are pressing safety issues in the workplace that need to be addressed beyond COVID-19. In this environment, the South Korean government’s view that civic engagement and public health are mutually exclusive might be misplaced.

Context: Increased strictness around social gatherings came as South Korea recorded the highest number of cases it has seen since March, raising concerns that COVID-19 might spread more aggressively during the country’s Chuseok holidays. Widespread public scrutiny of radical churches that contributed to recent cluster infections have helped strengthen the government’s case for stricter punishment of people participating in mass rallies.

Korea View was edited by Yong Kwon with the help of Sophie Joo, Sonia Kim, and Chris Lee.

Picture from flickr user odius kim

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• Over 4,000 delivery workers nationwide threatened to stop sorting parcels as a protest against heavy workloads ahead of the Chuseok holiday.
• These workers backtracked from the boycott after the Labor Minister pledged to increase manpower and improve working conditions.
• This year alone, seven parcel delivery workers died from overwork, as the coronavirus outbreak led to a sharp surge in the parcel delivery demand.

Implications: South Korean workers most exposed to the economic hardships in the pandemic economy enjoy the least amount of protection as the Moon administration’s progressive labor policies privilege full-time employees. The struggles of many delivery workers highlight the government’s lack of attention on issues of excessive work hours and unfair wages affecting part-time and gig workers. For instance, the recently introduced 52-hour workweek ceiling does not apply to these delivery workers. This reality persists despite President Moon Jae-in recognizing that delivery workers play a leading role in overcoming COVID-19.

Context: According to a report by the Korea Transport Institute, delivery workers are often on the job for more than 70 hours a week, sometimes without any breaks or time to eat a meal. Moreover, members of the Korean Confederation of Trade Unions claim that there has been a lack of preventative measures to safeguard the health of delivery service workers since the onset of the coronavirus. In fact, during the past few months, the Korean government appears to have been more focused on keeping the national economy intact by boosting the interests of both major corporations as well as small and medium enterprises (SMEs).

Korea View was edited by Yong Kwon with the help of Sophie Joo, Sonia Kim, and Chris Lee.

Picture from Wikimedia Commons account of Roadgo

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• On August 12, Samsung Fire & Marine Life Insurance became the first Samsung affiliate to finalize a collective bargaining agreement with its union.
• Last December, a court sent Samsung Electronics Board Chairman Lee Sang-hoon to prison and charged 25 others at the company with sabotaging union activities. Lee is widely considered to be Samsung Group’s second-in-command.
• A separate court ruling in October also ordered Samsung to present a plan ensuring the company would not break the law again.

Implications: The Korean government’s attitude towards union activism shapes domestic conglomerates’ openness to negotiations with their workforce. Under the pro-labor Moon Jae-in administration, Samsung is the latest company to signal its conformity with the government’s pro-labor posture by accepting collective bargaining. Many other companies permitted their workers to form new unions, including steelmaker POSCO and online search portal Naver.

Samsung may have been further motivated to accept unionization after the country’s courts demonstrated their willingness to levy harsh penalties on Samsung leaders. While the latest deal between Samsung Fire & Marine Life Insurance and its employees does not clearly guarantee negotiations on wages, the government’s persistent support for labor unions will likely lead to more explicit commitments from corporate leadership.

Context: Samsung has been behind the curve on unionization. Competitor LG Electronics has had a union since 1963, and Hyundai Motor employees have been unionized since 1987. In accordance with the October court ruling, an internal compliance commission recommended that Samsung Vice Chairman Lee Jae-yong end the firm’s no-union policy. Since then, workers at many Samsung affiliates established unions and began negotiating with management.

Korea View was edited by Yong Kwon with the help of James Constant, Sophie Joo, Sonia Kim, and Chris Lee.

Picture from flickr account of ETUC CES

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• A recent report from the Korea Development Institute reiterated that the South Korean economy remains under severe strain due to the reduction in global trade.
• However, the report also noted that consumer spending increased 1.7% in May after a 2.2% reduction in April. This creates greater expectation for domestic consumption to drive the economic recovery from the pandemic-induced economic hurdle.
• A delivery worker recently died of over-work, leading to criticisms that insufficient protections are in place for workers in the service industry.

Implications: The Korean government is struggling to balance the public’s demand to better protect service industry workers while simultaneously helping the domestic retail industry lead the economic recovery. With consumption in the domestic service industry providing one of the few bright spots in the economy, policymakers maybe wary of regulating employers in this sector. Meanwhile, the government’s failure to extend protections will erode public support for the administration which had promised to build a more equitable society.

Context: Already, workers with part-time contracts were losing jobs at a rate 70 times greater than that of workers in full-time positions. In this environment, policymakers fear that introducing measures to protect workers in the service sector would lead to higher unemployment. To break the binary choice of protecting workers or sustaining economic activity, the government has proposed extending unemployment insurance to all economically-active citizens. The hope is that this will lead to better treatment of the workforce by reducing the employee’s dependence on bad employers.

Korea View was edited by Yong Kwon with the help of James Constant and Sonia Kim.

Picture from flickr user Arnaud Matar

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• On June 22, Incheon International Airport Corp. announced plans to convert thousands of irregular workers into regular employees.
• This decision prompted a Blue House petition spearheaded by many current full-time employees at the airport that opposed the move.
• Incheon Airport acted as a pilot for the administration’s wider goal of eliminating irregular positions in the Korean public sector.
• The Blue House said its plan is aimed at addressing “fairness in the labor market” rather than “fairness in the hiring process.”

Implications: Pushback from regular workers to the government’s plan to extend benefits to their irregular peers betrays the fragility of worker solidarity in Korea’s labor market. The Blue House petition opposing this measure argues that upgrading irregular workers at the Incheon Airport is unfair to current full-time employees and people who are trying to find employment at the airport. The ongoing controversy at Incheon Airport reveals that regular workers themselves will likely be a major roadblock to the Moon administration’s goal of extending job security to more people in the labor market.

Context: Reforms instituted after the 1997 Asian Financial Crisis increased the number of irregular workers in Korea. This term is a shorthand for jobs that are poorly paid, provide few benefits, and do not offer long-term employment guarantees. On the other hand, more stable, better-paid regular jobs at publicly owned institutions like Incheon Airport are highly desirable, and many prospective employees prepare for years in hopes of landing a similar position. As of 2015, 86 percent of workers at Incheon Airport were classified as irregular. The bifurcation of Korea’s labor market into regular and irregular workers may have affected the sense of solidarity between these two classifications, amplifying existing challenges to worker advocacy stemming from the country’s low unionization rate.

Korea View was edited by Yong Kwon with the help of James Constant, Sonia Kim, and Ingyeong Park.

Picture from flickr user odius kim

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• In April, Prime Minister Chung Sye-kyun accepted the suggestion from the Korean Confederation of Trade Unions (KCTU) to form a new consultative organization that better highlights union voices.
• On May 1, President Moon signaled his support for the inclusion of labor unions in this body by underscoring the importance of solidarity with the labor community on social media.
• On May 11, the Federation of Korean Trade Unions (FKTU) agreed to participate in the consultative process. This will be the first time in 21 years that both KCTU and FKTU would be represented in the same committee.

Implications: The Moon administration’s proactive effort to include labor unions as stakeholders in public policy reflects the government’s outlook on the severity of the economic challenges ahead. Notably, the Korean government took unprecedented action to reconcile the FKTU and the KCTU, creating the basis for their joint participation in the consultative committee. Public dialogue emphasized that the active participation of these key stakeholders is necessary to implement drastic and tangible changes to the labor market as part of President Moon’s so-called “Korean New Deal.” In addition, the urgency reflects the administration’s view that the post-COVID headwinds are not navigable without unity in purpose among these various institutions.

Context: KCTU and FKTU have long maintained different political positions. Because the KCTU had been absent from the Korea Tripartite Commission in 1998, the relatively-moderate FKTU represented labor’s position in the public policy discussions. During the Park Geun-hye administration, relations between the FKTU and the government was damaged after the government implemented reforms despite strong opposition from the union. As a consequence, there had been little dialogue between labor and the Blue House until the start of the Moon administration.

Korea View was edited by Yong Kwon with the help of Gordon Henning, Soojin Hwang, Hyungim Jang, and Ingyeong Park.

Picture from flickr user odius kim

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• Coronavirus outbreak is likely to cripple the already-declining offline retail industry in South Korea.
• Last week, the Blue House announced policies to assist major conglomerates to cope with the coronavirus crisis.
• Most labor union gatherings were postponed or canceled due to coronavirus.

Implications: Coronavirus crisis may weaken South Korea’s labor unions by limiting their ability to mobilize workers amid infection fears and justifying claims that more flexible hiring and layoff policies are necessary to ensure the survival of domestic corporations. Recently, Lotte Shopping announced plans to shut down 30 percent of its offline stores. This is expected to cut over 50,000 employees. In response, Lotte’s labor union criticized the downsizing plan as shifting the consequences of poor management to the workers. However, the union of retail sector workers remained relatively quiet in the past few weeks as cases of coronavirus infections increased. The focus has instead shifted to demands for heightened safety measures against the coronavirus for the delivery workers.

Context: The Korean Mart Labor Union has been increasingly vocal in recent years, but have been stymied by growing challenges in the offline retail sector. Worsening market conditions due to the spread of the coronavirus is expected to further limit space for labor activism. Simultaneously, collective action by labor unions waned across the sector as the disease is discouraging workers from physically coming together for protests and other actions. Before the spread of the coronavirus, retailer Homeplus had faced significant pushback from its workers – but these protests have effectively disappeared since the spread of the coronavirus.

Korea View was edited by Yong Kwon with the help of Gordon Henning, Soojin Hwang, Hyungim Jang, and Ingyeong Park.

Picture from flickr user odius kim

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• On February 12, Deputy Prime Minister and Finance Minister Hong Nam-ki warned that the coronavirus could enhance uncertainties in the domestic labor market. Report from the Korea Development Institute echoed these concerns.
• Statistics Korea revealed that the number of jobs occupied by people in their 40s declined for 51 consecutive months.
• Significant share of the new jobs added in 2019 went to workers who were above the prime working age (25-54).

Implications: Economic uncertainties created by the U.S.-China trade war and the coronavirus outbreak revealed that skilled workers in South Korea’s manufacturing sector are more vulnerable to shocks in the global market. There are two drivers that place skilled manufacturing workers in this precarious position. First, internal changes in the manufacturing sector led to increased automation in domestic plants while more labor-intensive production was outsourced to emerging markets. Second, companies are more likely to terminate skilled workers in their 40s – generally the highest paid workers in the sector – when looking to reduce overhead cost during downturns. Reflecting these vulnerabilities, preliminary data showed that much of the job creation in 2019 went to workers who are outside prime working age. Further shocks could come from work stoppages by Chinese manufacturers due to the coronavirus.

Context: Through expanded fiscal spending, the South Korean government has increased the overall number of jobs, but these new opportunities have gone largely to the elderly. Data from August 2019 showed that South Korea’s low unemployment rate obscures the fact that job seekers above the age of 60 accounted for 391,000 out of 452,000 new jobs created during the survey period, while employment declined among the 40-49 age group. The number of people who have reached retirement age but are staying in the workforce also hint at the gravity of elderly poverty in the country – the average age of households in the bottom 20% of income earners is 63.4.

Korea View was edited by Yong Kwon with the help of Gordon Henning, Soojin Hwang, Hyungim Jang, and Ingyeong Park.

Picture from LG Electronics flickr account

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• On October 7, Tada, a ride-hailing mobile app platform, announced that it would increase its number of vehicles from 1,400 to 10,000.
• In response, 12,500 taxi drivers gathered to protest against Tada on October 23.
• On October 28, the Seoul Central District Prosecutors’ Office indicted the heads of Tada on charges of operating illegal passenger transportation business.

Implications: The South Korean government is struggling to balance its dual aim of promoting innovative business and protecting workers in existing industries. The government has been cutting regulations to accelerate innovative growth and incentivize startups. However, some innovations inevitably displace some traditional industries. The transportation industry is one of the most salient examples of this conflict. Recently, prosecutors indicted Tada executives following massive protests by taxi drivers who argued that the government should halt Tada’s illegal operations. The Korea Startup Forum, an advocacy group for local startups, voiced concerns that the indictment might nullify government’s efforts to boost innovation.

Some observers are concerned that the case against Tada might have a cooling effect on startups and investments in innovations related to the sharing economy. Because the indictment against Tada comes on the heels of similar cases involving Uber and Kakao, some have accused the government of “much talk but little action” on innovation.

Context: This is not the first time that the taxi industry fought against ride-sharing platforms. The government has been attempting to find a “win-win” solution that would allow startups like Tada to operate while appeasing taxi drivers. In July, the transport ministry proposed a plan in which service like Tada would contribute a portion of their earnings to a public fund that would purchase taxi licenses. However, both Tada and taxi drivers were dissatisfied with the government’s suggestion.

Korea View was edited by Yong Kwon with the help of Soojin Hwang, Hyoshin Kim, and Rachel Kirsch.

Picture from user Ged Carroll on flickr