Labor conflict in Korea intensifies over reform, minimum wage

Minister of Employment and Labor Lee Jung-Sik makes a statement at the meeting for labor reforms in Seoul on June 26. [Photo by Yonhap]

The conflict between labor and management groups in South Korea is escalating ahead of the two-week general strike notified by the Korean Confederation of Trade Unions (KCTU) from July 3.

According to the Ministry of Employment and Labor on Monday, Minister Lee Jung-Sik held a meeting in Seoul and discussed labor reforms.

“The KCTU has announced a strike and large-scale rallies that lack legitimacy and rationale, not aimed at improving the rights and interests of workers,” Lee said. “I call on them to show some responsibility by solving problems through dialogue instead of insisting on strikes that disrupt the national economy and everyday lives of people.”

In referring to the amendment bill on the trade union and labor relations adjustment act, which the opposition party has vowed to pass at the National Assembly plenary session on Friday, Lee said that “it is an anti-timely and unrealistic bill that will cause extreme chaos and conflict at industrial sites.”

“The amendment will amplify legal disputes and make people opt for strikes as the only solution,” the minister said. “We once again request that the National Assembly consider the bill rationally and carefully.”

The KCTU has announced a general strike from July 3 to 15, saying that the Yoon Suk Yeol administration is destroying labor, people‘s livelihood, democracy and peace.

The union claims the strike will be the largest in recent years. The Korean Metal Workers’ Union (KMWU), one of its affiliated unions, has also announced a general strike on July 12.

The trade union of Hyundai Motor Co. has already announced that it will hold a four-hour partial strike, joining the KMWU’s general strike for the first time in five years since 2018.

The conflict between management and labor is also expected to intensify as the legal deadline for deliberations on next year‘s minimum wage approaches on Thursday.

The Federation of Korean Trade Unions (FKTU), led by President Kim Dong-myeong and other executives, launched a tent protest in front of the government complex in Sejong on Monday, demanding an increase in the minimum wage and criticizing the management for demanding a minimum wage freeze.

“The Minimum Wage Council has a duty to work for the livelihood security of minimum wage workers, but it continues to ignore the minimum wage scheme and criteria in the discussions,” Kim said.

The management, in the meantime, noted that even a modest increase in the minimum wage would result in a huge number of job losses.

The Federation of Korean Industries (FKI) released a report on the impact of a higher minimum wage on jobs on Monday, pointing out that a 3.95 percent increase in the minimum wage to 10,000 won ($7.7) from 9,620 won next year will lead to a loss of 28,000-69,000 jobs, which is equivalent to 8.9-22 percent of the annual average of 314,000 new jobs over the past five years.

The report estimated that a minimum of 194,000 and a maximum of 470,000 jobs would be lost if the minimum wage was raised 26.9 percent to 12,210 won, as demanded by labor.

It also raised the possibility that the minimum wage hike will adversely affect the jobs of vulnerable labor groups such as young people aged between 15 and 29 and low-income earners.

According to the FKI, the number of jobs for young people is expected to drop to 15,000-18,000 if the minimum wage is raised to 10,000 won, and to 110,000-125,000 if it is raised to 12,210 won.

The number of jobs for low-income earners would decline to 25,000-29,000 if the minimum wage is raised to 10,000 won, and to 207,000-247,000 if the labor demands are accepted.