OECD head urges Korea to reform labor sector
By Yi Whan-woo
Reform of the labor market would be indispensable for sustainable economic development and social cohesion in Korea, the top official of the Organization for Economic Cooperation and Development (OECD) said Friday.
Angel Gurria, secretary general of the OECD, said the country should revise its long-hour working system to give more job opportunities to women, youth, seniors, and temporary laborers.
“I hope Korea will set up a sustainable welfare model through support of social groups which are relatively left out from the labor market,” he said.
His remarks at a meeting with Employment of Labor Minister Lee Chae-pil in Seoul were based on the OECD’s economic report and analysis on Korea released Thursday.
The report, titled “OECD Economic Survey: Korea 2012,” forecasts that the working-age population of the country will decrease from 2017 due to a low birth rate and aging society.
The demographic change will bring down the nation’s potential growth rate to 1.7 percent at worst.
Effective policies are required to efficiently utilize women, youth, seniors and temporary workers who are relatively isolated from the labor market, the survey adds.
The groups have difficulty in entering the market partially because of the long-working hour system. Korean workers’ annual labor hours are more than 2,000 hours, the longest among the OECD members. Such system, however, centers on a specific group, such as males in their 40s.
“In order to foster a labor market that involves those groups, such working conditions should be revised,” the OECD secretary general said.
As possible solutions for women, Gurria suggested expansion of a flexible working-hour system, high-quality child care services, and an extension of maternity leave.
Regarding youth unemployment, he said the social circumstances that favor college graduates should be changed.
The four-year level university students avoid blue-color jobs or job titles that are below their expectations.
High school graduates, on the other hand, have difficulty in finding jobs as a number of job positions require a college diploma.
“Job training for the college students as well as strengthening policy in favor of young job-seekers without college diplomas will be crucial,” Gurria said. The country sees a rising number of seniors as life spans lengthen, while employers ask their workers to retire early, for instance in their 50s or even earlier.
The OECD secretary general said an early retirement policy should be scrapped gradually and systematically.
“Under better working circumstances, employees should be given constant job training and companies should also increase their amount of retirement pension.”
Gurria pointed out the labor market in Korea is leaning toward full-time workers, with temporary laborers struggling under the high risk of layoffs as well as fewer benefits in terms of job training and welfare.
“The balance between growth and welfare is necessary in this case, and employers should put more effort on the welfare of the temporary employees.”
Guerria has been serving his second five-year term as the head of the OCED.
The OCED announces an economy report and analysis of its member countries biannually.