[Editorial] Raise productivity

Ministry pushing to enact 4.5-day workweek this year; flexible working hours needed first

The government is pushing for legislation of a 4.5-day workweek this year.

The Ministry of Government Legislation on Wednesday said that it will submit a new bill to support working hours reduction to the National Assembly this year as one of 123 legislative tasks of the government.

The Ministry of Employment and Labor on Thursday said that it had set aside a related budget and that it plans to revise the law on working hours this year.

Current statutory working hours are 40 hours per week, and companies can extend this to a maximum of 52 hours by adding 12 hours of overtime.

As a presidential candidate, Lee pledged to reduce standard working hours to 36 hours, or 4.5 days, as a transitional stage to the ultimate goal of a 32-hour or 4-day workweek.

The 4.5-day workweek aims at improving work-life balance. Of course, the purpose itself is positive. But it is necessary to listen to the concerns of businesses that the system, if rushed, could undermine their competitiveness.

A reduction in working hours will be burdensome for companies if it leaves pay levels unchanged and rigid overtime restrictions and low labor productivity unaddressed. And there is no guarantee that workers' concentration will get any better if they work less.

Experts have repeatedly indicated problems in inflexible working hours, for example, preventing research and development manpower in high-tech industries from working intensively for periods. Due to the strict enforcement of a 52-hour workweek, they must stop working and leave laboratories on time, which is rarely the case in South Korea's rival countries. Flexible working hours are essential for ventures and startups, too, but that is not allowed, either.

Above all, the country's labor productivity falls short of the Organization for Economic Cooperation and Development average. According to an analysis by the Korea Productivity Center, South Korea ranked 24th out of 37 OECD members in 2023 — a low ranking for a global top-10 economy.

If the country cuts back working hours suddenly while not resolving those issues, its industrial competitiveness will inevitably fall.

In particular, small and mid-size companies that cannot afford to boost staffing will struggle to survive. Complementary measures are needed before the new system is enacted.

The Korean Financial Industry Union declared to go on a general strike on Sept. 26 to demand the speedy legislation of the 4.5-day workweek.

Reduced working hours at banks will bring about discomfort to financial consumers. Bank employees earn an annual salary of 120 million won ($85,775) on average, which is the highest level in Korea. It is shameless for them to threaten a strike to reduce working hours while paying little attention to consumer inconvenience. Per capita labor productivity in the domestic service sector, where financial industry workers belong, is only about 40 percent of that in manufacturing. Furthermore, they make no mention of any reduction in pay.

The government should also give attention to the negative influence of the 4.5-day workweek on society at large.

If a trend to work less spreads, the diligence that has underpinned South Korea's economic growth so far would be undermined, and further development would be more difficult. Once working hours are reduced, it would become practically impossible to put them back, even after negative side effects take hold.

Working conditions will undoubtedly be improved if people work less without changes in pay. However, few companies would want to pay workers the same for working less.

South Korea's working hours are not short — South Koreans worked an average of 1,901 hours per year, 149 hours longer than the OECD average, in 2022 — but it should consider the reality of their low labor productivity. It first needs to introduce flexible working hours to raise productivity.