Sojugseongwi Focuses on 'Labor Market Reform'..."Bridging the Gap Between Large and Medium Enterprises, Regular and Non-Regular Workers"

The Wage Gap Between Large Corporations and SMEs Has Narrowed... Discussion on Wage System Reform Needed

Hong Jang-pyo, Chairman of the Special Committee on Income-Led Growth, is being interviewed by Asia Economy on the 21st. / Photo by Moon Ho-nam munonam@

[Interview = Asia Economy Kang Hee-jong, Head of Economic Department, Summary = Jang Se-hee, Reporter] Hong Jang-pyo, Chairman of the Special Committee on Income-Led Growth under the Presidential Policy Planning Committee, named 'labor market reform' as the key task for this year. In an interview with Asia Economy on the 21st of last month at his office in Jongno-gu, Seoul, Chairman Hong stated, "We need to resolve the polarization between regular and irregular workers, and between large corporations and small and medium-sized enterprises (SMEs)."

This aligns with President Moon Jae-in's New Year's address, in which he pledged to enhance the public's perception of labor market reform. Previously, President Moon emphasized supporting the establishment of the 52-hour workweek system for SMEs with fewer than 300 employees and improving the rationality and transparency of the minimum wage determination system.

He said, "According to official statistics released by the International Monetary Fund (IMF) and the International Labour Organization (ILO), transactions between large corporations and SMEs in our country stood at 100 to 55," adding, "Although the minimum wage gap has begun to narrow, that alone is insufficient; the wage system must be changed." He stressed, "The policies implemented so far must produce results that truly change the lives of the people." Furthermore, Chairman Hong revealed plans to expand the job- and competency-based wage system, which President Moon had proposed as a national agenda, starting from the public sector and extending to the private sector. The job-based wage system is a wage structure that pays according to the value of the job, such as its difficulty. He emphasized, "There is a huge difference in length of service between large corporations and SMEs," and "especially, SMEs experience high turnover." He stated, "We need to start with the public sector."

He also pledged efforts to reduce the gap between regular and irregular workers. He explained, "It can be seen as preparatory work," and "this is an area where compromise between labor and management is necessary." He is also considering measures to continuously develop and invest in human resources. He said, "As the industrial environment rapidly changes, the main industries are shifting," and "going forward, investment in research and development (R&D) and human resources will be necessary." He emphasized, "Increasing investment in human resources and providing education and training on how to improve productivity are essential."

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