Bureaucrats, unions should give up their vested interests
Another massive clash is impending between the government and organized labor over how to reform Korea's inefficient and debt-ridden public sector.
President Park Geun-hye declared war on the unions of state enterprises and public institutions Monday, warning them not to resist her reform efforts. "Neither the government nor the public will tolerate your lax, irresponsible management any longer," the chief executive said.
Union leaders struck back by claiming that the government is passing the buck for its mistaken policies and poor personnel management onto unions.
Both sides are right. And wrong.
President Park is right to take issue with hefty employee compensation packages in state companies, most of which are drowning in debt. The unions are also right, as most of their debts have been incurred after the government forced them to conduct ill-conceived projects, such as wasteful refurbishment of major rivers and reckless development of resources overseas.
Park is wrong because she failed to acknowledge, or ignored, the fact that much of their mismanagement is due to unqualified CEOs who arrived at their desks courtesy of parachute appointments from Cheong Wa Dae. The labor side is also wrong because they have capitalized on such weakness of top managers by snatching excessive welfare benefits from them, ranging from scholarships for employees' children studying abroad to even dental treatment expenses.
So the solution appears simple, as taxpayers see it. President Park first needs to practice what she has preached by refraining from sending her cronies to the top posts at state firms as well as banning bureaucrats from seeking post-retirement jobs in public corporations and institutions. The unions for their part have to make efforts to shed the ignominious label of being "tax eaters" by providing better public services at lower costs ― or by ceasing to be the "workplaces even gods wish to join."
However, chance would be a fine thing if past experiences are any guide to go by. In reality, chances are high that Park will likely try to drive unions into a corner riding on public opinions hostile to these labor aristocrats while continuing to distribute CEO posts as if they are trophies. Unions will respond in kind, by forcing managers to sell off idle assets and curtailing projects scale, but not slashing employee benefits to any significant extent, and everything will go back to business as usual.
The two conflicting sides have one thing in common, however ― they both are forgetting what these public corporations are for: maximizing the public good for the least cost.
So Deputy Prime Minister Hyun Oh-seok is wrong to think that the smaller the public sector, the better. Korea's share of public spending against GDP stands at only 30.2 percent, second to last among OECD countries and way below the average of 45.4 percent, while the public sector's share in total employment is a mere 6.5 percent compared with the OECD average of 15.5 percent. It means the nation has to expand the public sector further, instead of trying to reduce it through thoughtless privatization.
President Park can attain her employment goal of 70 percent by raising public sector hiring to the OECD average, and creating 2 million new jobs. All this shows why public sector reform should start not by live-or-die fights to defend vested interests but by mutual concessions for the entire nation, and its people.
Another massive clash is impending between the government and organized labor over how to reform Korea's inefficient and debt-ridden public sector.
President Park Geun-hye declared war on the unions of state enterprises and public institutions Monday, warning them not to resist her reform efforts. "Neither the government nor the public will tolerate your lax, irresponsible management any longer," the chief executive said.
Union leaders struck back by claiming that the government is passing the buck for its mistaken policies and poor personnel management onto unions.
Both sides are right. And wrong.
President Park is right to take issue with hefty employee compensation packages in state companies, most of which are drowning in debt. The unions are also right, as most of their debts have been incurred after the government forced them to conduct ill-conceived projects, such as wasteful refurbishment of major rivers and reckless development of resources overseas.
Park is wrong because she failed to acknowledge, or ignored, the fact that much of their mismanagement is due to unqualified CEOs who arrived at their desks courtesy of parachute appointments from Cheong Wa Dae. The labor side is also wrong because they have capitalized on such weakness of top managers by snatching excessive welfare benefits from them, ranging from scholarships for employees' children studying abroad to even dental treatment expenses.
So the solution appears simple, as taxpayers see it. President Park first needs to practice what she has preached by refraining from sending her cronies to the top posts at state firms as well as banning bureaucrats from seeking post-retirement jobs in public corporations and institutions. The unions for their part have to make efforts to shed the ignominious label of being "tax eaters" by providing better public services at lower costs ― or by ceasing to be the "workplaces even gods wish to join."
However, chance would be a fine thing if past experiences are any guide to go by. In reality, chances are high that Park will likely try to drive unions into a corner riding on public opinions hostile to these labor aristocrats while continuing to distribute CEO posts as if they are trophies. Unions will respond in kind, by forcing managers to sell off idle assets and curtailing projects scale, but not slashing employee benefits to any significant extent, and everything will go back to business as usual.
The two conflicting sides have one thing in common, however ― they both are forgetting what these public corporations are for: maximizing the public good for the least cost.
So Deputy Prime Minister Hyun Oh-seok is wrong to think that the smaller the public sector, the better. Korea's share of public spending against GDP stands at only 30.2 percent, second to last among OECD countries and way below the average of 45.4 percent, while the public sector's share in total employment is a mere 6.5 percent compared with the OECD average of 15.5 percent. It means the nation has to expand the public sector further, instead of trying to reduce it through thoughtless privatization.
President Park can attain her employment goal of 70 percent by raising public sector hiring to the OECD average, and creating 2 million new jobs. All this shows why public sector reform should start not by live-or-die fights to defend vested interests but by mutual concessions for the entire nation, and its people.
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