What, no weekend? South Korea’s reactionary employers

By Aidan Foster-Carter, Asia Tims, 7 June 2002

Whenever South Korea’s industrial relations are discussed, the spotlight is nearly always on labor—and almost invariably negative. True, some Korean trade unionists have a lot to answer for, and a spot of growing up to do. Shaven heads, red headbands, clenched fists—let alone steel pipes, stones and Molotov cocktails; though those are far rarer nowadays than persistent stereotypes would suggest—and that went out with the 1970s.

Leave antics and agitation for the football fans. In a global economy, where footloose firms have the whole planet to play with, this is not the way to win friends and influence people. Seoul’s latest slogan is Dynamic Korea, Hub of Asia. So why put a spoke in it?

In reality, militancy is the exception, not the rule. Anyhow, labor is only half the story. And did you ever wonder what bred that militancy in the first place? Decades of repression, that’s what. During the dark decades of military dictatorship, Korean employers could and did treat their workers like scum. If any dared raise a whisper against long hours, foul conditions or sexual harassment, then hired thugs—the police or goons, same difference—simply beat them into submission.

Some activists burned themselves to death in protest; striking women textile workers had excrement thrown at them. Small wonder that in a culture where grudges (han) run deep, old scars from not so long ago still shape suspicious attitudes.

What of the other side? Since democracy arrived in 1987, South Korean employers can no longer rely on the riot squad to do their dirty work. They’ve had to grant big wage increases—so Korean workers can at last afford to buy the goods their own skilled hands have made. That’s not just justice, but sound economics. The ensuing consumer boom has weaned Seoul off its old unhealthy dependence on selling abroad. Last year, exports flagged—but Koreans kept spending, and kept their country out of recession.

Yet not everything has changed. South Koreans still put in some of the word’s longest hours. Diligence and effort are virtues in theory—but in practice, quantity is bad for quality. As in Japan, subordinates have to hang around doing nothing much until the boss finally heads home. Just great for family life.

So is another peculiarity. South Korea is the only Organization for Economic Cooperation and Development (OECD) member state that still works a basic six-day week, rather than five. Result: no weekend, or not much of one. Naturally, foreign firms aren’t having that. They almost all operate the same five-day regime as at home. This makes them attractive employers, as does their readiness not just to hire women but to allow them real careers that don’t end with marriage. Persistent sexism is another blot on Korean employers—and a stupid waste of half the nation’s talents.

Now, at last, the six-day week is under attack. The Kim Dae-jung government wants to join the modern world and bring it down to five. This is partly a sop to the unions, who feel (rightly) that they’ve borne most of the pain of restructuring since the 1997 financial crisis. But it’s also a bid to boost an economy whose focus is already shifting away from production to consumption, and from industry to services.

Official estimates are that bringing in a proper weekend will boost GNP by 4.7 percent and create 680,000 jobs, especially in leisure and service sectors like tourism, hotels and sport. Already last year Koreans spent 83 trillion won (US$65 billion) on leisure—up fivefold since 1990—accounting for 15 percent of GNP. By one calculation, each additional 10 minutes of free time creates new spending of 1.7 trillion won.

So are bosses rushing to implement this manifestly modern measure? As if. The Korean Employers Federation (KEF) is fighting it tooth and nail: claiming that its members face ruin unless public holidays are reduced to compensate. The Federation of Korean Industries (FKI), which speaks for the chaebol (large conglomerates), says the same. Speaking of ruin, it was FKI stalwarts like Daewoo, Hyundai et al that all but laid low the whole country with their reckless debt-fueled expansion.

So far Korean taxpayers have shelled out 156 trillion won to clear up the mess. Few of the actual culprits have had to pay. And yes, these are the same paragons who for years oppressed their workers—and bribed the generals.

With that track record, silent assent would be more seemly. Yet the KEF has no shame—and no sense either. On the ground, the troops who can see the writing on the wall are starting to break ranks. Firms are moving to a five-day week, whatever their leaders say. On May 24, a whole sector gave way. Banks will introduce a five-day week from July—for which the KEF roundly attacked them, worrying inter alia how exporters would cope at weekends.

Well, if the rest of OECD can do it, then Korea will find a way. It’s sad, and strange, that captains of industry should be quite so thick-headed. You’d think the lesson of the post-1987 wage rises would have sunk in by now. They were a challenge—but one that forced firms to cut fat and be more efficient, while creating a home market that massively boosted demand for their products.

In the inexorable shift from producer to consumer, goods to services, quantity to quality, a full weekend is the next logical step. Now as before, what employers give up, they will get back: in a harder working, more relaxed, happier, and more efficient work force, and in the growth of new sectors for profitable investment. They should wise up, and get shot of the old feudal attitudes once and for all.