It is good to hear the violent labor protests in Chittagong, Bangladesh, have subsided and businesses returned to normal. Also reassuring was the fact that Youngone Corp. and five other Korean firms operating there were targeted not due to their exploitation but to their size. Still the increasingly frequent union sabotages in the South Asian country shows the ``low-wage belt” is no longer as it was.
What triggered the latest clash were workers’ accumulated complaints about the minimum wage in the garment industry of 3,000 taka, or $43, a month. This is one fourth of wages paid to workers in China’s coastal provinces. Given that Chinese workers in certain industries, say metal works, receive less than 3 percent of their American counterparts, one can’t help being stunned at the extremity of another ``global imbalance” ― in manual workers’ pay this time.
Youngone, which produces clothes and hiking gear for Western brands, may have few other options but to squeeze local workers to meet the demand for lowest-priced supplies from its multinational customers. Korean firms are finding themselves sandwiched in the global chain of labor exploitation.
Enhancing automated production and moving up the industrial ladder to high-tech and service industries should be a solution but it takes time.
These Korean firms will have to find a way out if they are to stay in businesses relying on low-cost labor. Asking the multinationals to be less profit-minded and turn more humanitarian will be hard, if not downright useless.
Changing oneself is always easier than trying to make others change. The Korean companies need to reflect on themselves whether they are still resorting to outdated labor management ― or lack thereof ― marked by physical and verbal abuses and racial discrimination. If some Korean firms are still doing this, they are running squarely counter to the government’s ``learn Korean” drive of handing over the nation’s experiences and know-how of industrialization to less developed countries.
Korean employers should introduce more humane management by trying to understand host countries’ customs and culture, as they move along the low-wage belts from China to South Asia, Latin America and Africa.
What the domestic small- and medium-sized enterprises miss most in this regard is an alternative named North Korea. Conservatives and other inter-Korean hawks may regard the Gaeseong Industrial Complex as just a political showcase, but it is not. The monthly wage of North Korean workers in the joint industrial park still remains at little more than $50.
Add to this the geological proximity as well as cultural and language similarities, and expand Gaeseong to entire North Korea, then one can see why the small business owners say if the FTAs are beneficial for large enterprises, North Korea is vital for SMEs. Nor is it any wonder quite a few economists maintain South Korea’s economic future is in North Korea, which has abundant natural and human resources.
All this sums up to another reason the self-professed ``pragmatic government” must change its North Korea policy.