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The Peninsula

Collective Bargaining at a Crossroad

Published May 29, 2019
Author: Yong Kwon

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

Implications: The Korean government faces difficulties balancing demands from competing stakeholders as it advances policies to improve domestic working conditions. Various employee associations lauded the recent announcement that the government will ratify ILO conventions protecting workers’ right to collective bargaining. In particular, the KTU saw the prospective ratification as a path to legal reinstatement after the previous administration disenfranchised the organization in 2013 for violating government guidelines on union membership. However, the Ministry of Education has remained quiet on KTU’s post-ratification status, possibly to avoid a conflict with the judiciary that is still adjudicating KTU’s appeal.

The government also anticipates pushback to the ratification of ILO conventions from the business community. The Korea Employers Federation has accused the government of bias and demanded that the legislature also pass parallel measures protecting private enterprises. These include greater latitude for using strikebreakers and stricter rules against workers’ occupation of workplaces – all measures that would incite strong rebuke from unions.

Critics point out that the administration can do more to improve the livelihood of workers. A government audit found that 25 private bus companies that received government subsidies provided 70 percent of its income to shareholders while not raising the wages of their drivers. Here, increased collective bargaining powers may strengthen the bus drivers’ leverage in wage negotiations – but it also risks a strike by workers who could create an unwelcomed disruption to the economy.

Context: According to Switzerland’s Adecco Group, Korea is one of the lowest ranked countries on labor and management cooperation. This friction weighs down the country’s ranking on the ease of doing business – even as international statistical organizations continue to list South Korea as one of the most innovative and dynamic economies in the world. The hope is that the adoption of ILO conventions would allow Seoul to not only ensure a better life for its citizens but also elevate its standing in the world as a destination for investments and new businesses. Ratification may also expand Korea’s access to old markets, as post-industrial societies like the European Union demand Seoul’s adherence to ILO conventions.

Korea View is edited by Yong Kwon with the help of Haram Chung, Yea Ji Nam, Steven Lim, and Haeju Lee.

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