Go to Contents Go to Navigation

(LEAD) Finance minister urges early compromise on labor reform

All News 18:03 August 31, 2015

(ATTN: UPDATES with more details in paras 8, 11-13; ADDS photo)

SEOUL/SEJONG, Aug. 31 (Yonhap) -- The finance minister urged members of the tripartite committee Monday to reach a compromise on ways to reform labor market competitiveness early next month so the government can set aside funds to strengthen its social security net.

Speaking to economic news editors of local media outlets in Seoul, Choi Kyung-hwan said the committee needs to come up with a compromise by Sept. 10 if the government is to set aside the necessary budget to help people who may be affected by an overhaul in the country's labor rules.

"If a middle ground is not reached by the date, the government will have no choice but to ask parliament for bare minimum in funding," the finance minister said. "Any agreement must be based on all sides surrendering vested interests to promote what is good for the country as a whole."

The finance ministry plans to submit the 2016 budget on Sept. 11.

Businesses and the government have called for greater flexibility in the hiring and firing of workers to cope with the country's so-called dual labor market problem. This refers to the gap between full-time regular employees who enjoy "excessive" job security and good pay vis-a-vis non-regular workers whose employment is tenuous and are usually paid less than their regular employee counterparts.

The government has said making the labor market more flexible can make it easier for young people to find jobs.

Data showed the unemployment rate for people between the ages of 15 to 29 reached 9.4 percent in July, much higher than the 3.7 percent average for the country as a whole.

The business community, represented by the Korea Employers Federation, has also called for changes to make it possible to alter existing "rules of employment" without the consent of employees. Entrepreneurs, moreover, are calling for all labor-related reforms to be made into law instead of being forwarded as non-mandatory state guidelines.

Choi, who doubles as deputy prime minister in charge of economic affairs, said while it is no easy task to reach a settlement, failure to reach middle ground is seriously affecting the economy's ability to create more jobs in a timely manner.

The meeting with reporters follows the Federation of Korean Trade Unions (FKTU)'s return to the negotiation table last week after a four-month-long boycott.

The country's unionized workers, represented by FKTU, meanwhile, stressed they agree on the need for change, but have argued that more must be done to reduce the number of irregular workers instead of just striving to weaken the job security of regular workers.

It also stressed that management is trying to blame workers for all existing problems.

"Companies are responsible for the growing disparity between the haves and have nots," the umbrella labor union claimed. "Before management asks workers to make sacrifices, it should deal with exorbitant wages given to CEOs as well as coping with the utter lack of transparency in the way family-run conglomerates are managed."

Originally, the tripartite committee planned to reach some sort of broad compromise on various issues by next Monday, but the labor union's opposition to moves by the government to introduce wage peak system in the public sector is causing delays. The FKTU even threatened to walk out again if the government pursues the wage peak system.

Seoul wants to introduce wage peaks for all 316 public corporation and organizations by year's end. As of late last week 65 public corporations agreed to the system that entails workers nearing retirement to accept lower wages. The money saved can be used to hire new workers.

yonngong@yna.co.kr
(END)

HOME TOP
Send Feedback
How can we improve?
Thanks for your feedback!