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Overview of Korea’s development experience

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Employment

Labor movement

During the colonial period, the labor movement also represented a political movement against the Japanese occupation (Sookon Kim and Ju-Ho Lee, 1995). Many workers considered their employers, mostly from Japan, not as partners for mutual prosperity, but as adversaries to defeat. This characteristic carried over into the 1960s-1980s when the adversaries were no longer Japanese employers but domestic authoritarian rulers.

After the liberation, many labor unions were organized with a strong political bias (right or left) and fought each other. The government enacted basic labor laws during the Korean War that focused on protecting workers and were quite progressive in nature.

Their purpose was to win favor with the workers in the midst of the struggle with communism. But given the lack of government’s administrative capacity and the scarcity of profitable businesses at the time, labor laws did not have much real meaning. The gap between laws and reality became commonplace after that.

Labor unions, highly politicized and engrossed in infighting, continued to form and disband a long political lines. The Federation of Korean Trade Unions (FKTU) was formed in November 1960, but made little difference. In 1961, the military government suspended labor laws, dissolved the FKTU, and converted company-level unions into fifteen industry-level unions. In 1962, it also placed restrictions on civil servants ’three basic labor rights (i.e., rights to organize, bargain collectively, and strike).

The government further weakened labor unions by prohibiting multiple unions within a firm, reinforcing the ban on political involvement by labor unions, and allowing employers to escape from punishment for unfair labor practices if they corrected them afterwards. In return, the government expanded statutory benefits and protection for workers, including weekly and annual paid leave, severance payments, and limited work hours.

The 1970s witnessed the increasing oppression of the labor movement. In December 1972, the government declared a state of emergency and promulgated the Act on Special Measures on National Security. Collective bargaining as well as strikes was now subject to mediation by the authorities. Moreover, the revised Constitution of 1973 (the Yushin Constitution) stipulated that the workers ’three basic rights could be limited or denied by law. The labor movement turned more violent and more politically charged, especially after an incident in November 1970 in which a worker in a sweatshop set himself on fire in protest at government policies.

The suppression of the labor movement continued in the 1980s. The Chun Doo-hwan administration, installed in 1981, amended the Constitution with additional restrictions on collective action. The Labor Union Act was revised to restrict the workers’ right to organize by prohibiting union shops and industry-level unions, and requiring a minimum number of votes from workers to form a labor union in a firm. The intervention of third parties was also outlawed. Furthermore, the Labor Dispute Adjudication Act was revised to prohibit workers from demonstrating outside their workplaces. This prohibition actually inflicted larger losses on firms as striking workers occupied workplaces instead and disrupted production lines.

On June 29, 1987, Roh Tae-woo, the presidential candidate of the ruling party, made a public pledge to expand civil rights and revive democracy if he won the election. This resulted in an outbreak of labor disputes. There were about 3,500 labor disputes in July and August alone and 3,749 in total during the year, a huge jump from 289 in 1986. The issue was about wage increases in most cases, but the real issue was often about organizing anew labor union if there had been none or dismantling the existing company-controlled union. In November, laws were revised and restrictions on the workers’ right to organize were partly eased. Labor disputes subsided in following years (1,878 in 1988, 1,616 in 1989, and 322 in 1990).

To summarize, the oppressive labor market policies in the 1960s through 1980s contributed to high economic growth and rapid job creation, but at the same time produced political instability and hampered social integration. The legacy of violent labor movement still remains.

Source : SaKong, Il and Koh, Youngsun, 2010. The Korean Economy Six Decades of Growth and Development. Seoul: Korea Development Institute.

References


· Kim, Sookon and Ju-Ho Lee, “Industrial Relations and Human Resource Development,” in Dong-Se Cha and Kwang Suk Kim (eds.), The Korean Economy 1945-1995: Performance and Vision for the 21st Century, Korea Development Institute, 1995, p.524-565 (in Korean).