'It's the economy, stupid'
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The abnormally rising employment trajectory we saw last year is reversing. Last March, the number of the employed increased by only 249,000, which is about 50,000 lower than the March average of the last 10 years. Without the feeble resilience of the manufacturing sector, the number would have been lower than 200,000. However, the hip-shooting National Assembly, without knowing what they are doing, is competitively proposing new bills holding up the slogan of worker protection. Protecting workers is as important as creating jobs. However, the majority of the current proposals are intended to directly restrict the use of the workforce, which could cause employment contraction. If you delve into the newly proposed bills, you can easily find that they are designed only for workers who are currently holding jobs. Ironically the proposed bills are discriminating against the unemployed by contracting their employability. What is worse is that the National Assembly persists with the concept that protecting workers and creating jobs cannot be tackled harmoniously.
The currently raging debate over the restriction on the usage of non-regular workers could give you a clear message. Currently, firms can hire fixed-term workers for a maximum of up to 2 years, but the Assembly is making additional restrictions to let companies hire them only if there is vacancy due to childbirth, parental leave, or if they are seasonal businesses. Moreover, presently workers can be dispatched only to 32 specific business types, but parliament is trying to impose additional restrictions on the justifiable cases of using dispatched workers. To sum up the situation, the Assembly is putting stronger restrictions on hiring non-regular workers.
Beneath the debate lies a naive idea that stronger restrictions may boost the regular employment headcount. Would you agree that regular employment may increase if less and less non-regular workers are hired? It sounds pretty much like nonsense. There are several other options that can substitute for non-regular workers other than regular employment: a labor input reduction, automation, or even the plant itself could be relocated overseas. The more pivotal thing is that the possible segment of workers that could lose their jobs is mostly the current non-regular workers if the proposed bills go into effect. Clearly, the bills aimed at protecting non-regular workers are actually discriminating against them.
Then, would there be any way to minimize the employment contraction as well as to improve the working conditions of non-regular workers? Let’s give a glance abroad. The global aspect of lawmaking is shifting to admit the necessity of non-regular workers and at the same time to prohibit unjustifiable discrimination against them. The main reason for this is not only to prevent the abuse of non-regular workers, but also to maintain labor flexibility, which is an incentive to encourage employment. In other words, the global trend is to seek balance between creating jobs and protecting workers. A good example of this can be found in the European Guidelines for Dispatched Workers, which suggest the equal treatment principle to protect the workers, and at the same time the active encouragement of the use of dispatched workers through a flexible labor market.
Unfortunately, the Korean way of imposing regulations may lead to several side effects. It may enhance the rigidity of the labor market and thus hamper job creation. Also, it may reduce the incentives to hire dispatched workers so it could be a cause of employment instability. The law should not directly restrict the use of non-regular workers, but rather should impose regulations only on unjustifiable discrimination. This way, the harmony of creating jobs and protecting workers may be achieved. The current debate at the National Assembly is not an economic debate but rather a political deal. Former U.S. President Clinton’s slogan in 1992 campaign comes to mind. “It’s the economy, stupid.”