"21st National Assembly Environment and Labor Committee Should Focus on 'Creating Private Sector Jobs'"

Survey on Labor Issue Awareness among Business Professors in the Seoul Metropolitan Area

Korea Economic Research Institute

[Asia Economy Reporter Dongwoo Lee] The Environment and Labor Committee of the 21st National Assembly emphasized that securing the capacity to create private sector jobs should be the top priority.

The Korea Economic Research Institute announced on the 14th that this conclusion was drawn from a 'Labor Issue Awareness Expert Survey' conducted by Monoresearch, a public opinion research agency, targeting 110 professors in business-related fields at universities located in the metropolitan area.

When asked about the key keywords that the 21st National Assembly Environment and Labor Committee should focus on, the responses were ▲Securing capacity for private sector job creation (32.4%) ▲Improving labor market flexibility (28.2%) ▲Supporting COVID-19 employment measures (14.8%) ▲Expanding employment safety nets (12.7%) ▲Building cooperative labor-management relations (11.5%), in that order.

When Environment and Labor Committee members consider legislation related to labor, the most important factors were ▲Consistency and predictability of laws and regulations (30.0%) ▲Communication with labor and management parties (29.1%) ▲Compliance with global standards of laws and regulations (20.0%) ▲Acceptability of laws and regulations in the management field (15.5%).

They also recognized that while improvements in laws and systems to make working hours, wages, and job types more flexible are necessary to strengthen labor market competitiveness, ratification of ILO conventions and amendments to the Trade Union Act should be approached cautiously.

Items expected to have a positive impact on labor market competitiveness included ▲Expansion of flexible working hours such as flexible work systems (82.7%), ▲Reform of wage systems linked to job performance (80.0%), ▲Differential application of minimum wages by industry and region (70.0%), in that order. The abolition of dispatch and fixed-term employment regulations received more positive opinions (34.5%) than negative ones (20.0%). Conversely, ratification of ILO conventions and amendments to the Trade Union Act were viewed as having a negative impact on the labor market (37.3%) more than positive (32.7%).

The Korea Economic Research Institute explained, "It appears that concerns are reflected that the previously discussed amendments to the Trade Union Act, which are biased toward protecting workers, could weaken labor market competitiveness."

Regarding issues related to strengthening labor market stability, opinions were divided. ▲Guaranteeing severance pay for workers with less than one year of service received more negative opinions (39.1%) than positive (27.3%). However, ▲Strengthening requirements and procedures for layoffs and ▲Expanding regular employment received positive opinions slightly higher than negative by 0.9 percentage points and 4.6 percentage points, at 36.3% and 38.2%, respectively.

Among Korea, the United States, China, and Japan, the country with the highest labor market flexibility was the United States. When Korea's labor market flexibility is set at 100, the United States scored 149, Japan 102, and China 98, indicating that Korea's labor market is more flexible than China's but more rigid compared to the United States and Japan. A value above 100 means higher labor market flexibility compared to Korea.

The comparative advantages of the labor markets in the United States, Japan, and China compared to Korea were as follows: The United States' greatest strength was having a better wage system linked to job performance than Korea; Japan was noted for freely allowing various employment types such as dispatch and fixed-term employment; China, although having overall lower labor market flexibility than Korea, showed competitiveness in ease of employment adjustments such as dismissal and reassignment.

Regarding next year's minimum wage, 68.2% supported a 'freeze,' exceeding the majority. Opinions favoring a 'raise' totaled 17.3%, with ▲a slight increase within 3% (14.6%) and ▲a significant increase exceeding 3% (2.7%). Conversely, opinions favoring a 'reduction' were 14.5%, with ▲a slight decrease within -3% (11.8%) and ▲a significant decrease exceeding -3% (2.7%).

Choo Kwang-ho, Director of Economic Policy at the Korea Economic Research Institute, stated, "The Environment and Labor Committee of the 21st National Assembly needs to make flexible improvements to domestic labor market-related laws and systems, such as expanding flexible work systems and reforming wage structures, so that companies can respond to the changed economic environment."

This content was produced with the assistance of AI translation services.