ed Return to labor talks

The tripartite talks to overhaul the nation’s labor market have broken down after an umbrella labor group walked out of the negotiations Wednesday. The Federation of Korean Trade Unions (FKTU) decided to stop participating in the talks, rejecting the five proposals to reform the labor market presented by the government and employers.

The most contentious of the proposals was how to make it easier for employers to lay off underperforming workers. Labor and management have also been in a fierce confrontation on changing the seniority-based wage system.

During the talks that began in September, representatives from management have insisted that fresh employment won’t be possible without increased labor market flexibility. But unions denounced the proposals as an attempt to lay off employees at will.

The government allegedly offered a compromise at the last minute, but to no avail. The breakdown is certainly the result of the three parties having adhered to immediate gains rather than considering the future of the country.

The government deserves blame for lacking a concrete strategy, while employers can’t avoid criticism for being too unyielding. No wonder unions are accused of rupturing the talks to protect their vested interests at the expense of young workers.

True, no one can deny the rationale for labor market reform. It’s highly likely that the Korean economy will lose its competitiveness unless the seniority rule and lifetime employment are tackled immediately. Most serious is the labor market’s dual structure ― the huge gap between full-time regular workers at large companies and non-regular employees.

Full-time workers receive much higher salaries, but they are overprotected under the umbrella of strong unions. In sharp contrast, non-regular laborers at smaller firms receive wages that remain at only 40 percent of those paid to regular workers. The result is that a growing number of companies, fed up with militant labor activism, have fled the country, resulting in a scarcity of jobs.

Since the breakdown of the negotiations, the government has been under pressure to unilaterally deal with pressing labor issues, based on what was agreed on during the talks, in step with next year’s extension of the retirement age.

But that will only serve the interests of regular workers and result in deepening the younger generation’s jobless woes. Also, it will be all but impossible to get relevant bills endorsed at the National Assembly.

There is a ray of hope though, given that the FKTU hinted at returning to the negotiating table on condition that the five proposals are withdrawn. The three parties should resume talks, keeping in mind the urgency of reaching a consensus on labor market reform.