By Choi Kyong-ae
The Ministry of Strategy and Finance on Friday urged labor and management to make concessions to promote flexibility and reform the labor market.
“The government is stepping up efforts to reform the labor market to generate more quality jobs and improve the competitiveness of companies,” Finance Minister Choi Kyung-hwan said at a meeting with other economy-related ministers.
“Moreover, it is also making efforts to train the workforce and make them prepared for diverse demands in industries.”
Choi has called for the structural reform of the labor sector where he said regular workers were “overprotected.”
“The government’s efforts alone won’t bring a reform to the less-flexible labor market because companies and their labor unions often disagree due to their own interests,” the minister said. “So a major compromise between the related parties should be sought in a win-win strategy.”
He said that among other things, if labor and management gave up some of their vested rights and made concessions, the government would give full support to reforming the labor market by strengthening the social safety net for workers.
On Friday, the Economic and Social Development Commission, a tripartite meeting composed of government, labor and management representatives under the wing of the President’s Office, discussed ways to narrow the gap in wages and other benefits between regular and non-regular workers.
A spokesman for the commission, Lee Se-jong, said, “There are two labor markets. The first market is composed of regular workers and large companies with labor unions. The second market consists of non-regular workers and small companies without labor unions.
“We find an ever-deepening gap between the two markets in terms of wages and other benefits. There should be a big breakthrough to allow workers to move between the two markets.”
He said the commission planned to announce a detailed action plan to boost not only flexibility but also job security by the first half of 2015
Choi said that to help achieve structural reform, the government would make an all-out effort to jump-start the sluggish domestic demand, reduce household debt and enhance the competitiveness of major industries.
He said the government would focus on structural reforms in key economic sectors next year to improve the economy’s fundamentals.
He said international society had turned to the “new normal” to escape the trap of low growth and low prices. It was time for Korea to make the move, the minister said.
However, “growing uncertainties (such as the slowdown in the eurozone, China and Russia) and structural weakness (such as inactive spending) in the economy would remain a stumbling block to recovery for a certain time,” he warned, without elaborating.