Concerns Over Labor Conflicts Among Regular Employees... Explosive Dissatisfaction in Public Enterprises

Employees "Thoroughly ignoring fair competition... Opportunities should be given to job seekers"
Experts "Labor market distortion... COVID-19 has further narrowed employment opportunities for youth"

[Asia Economy Reporters Kim Bo-kyung, Moon Chae-seok, Jang Se-hee] Park Mo (60), a 30-year veteran of a public enterprise, said, "The foundation of democracy is equal opportunity for all and fair competition, but these opportunities are thoroughly ignored in public corporations," adding, "Equal opportunities should be given to all job seekers who have prepared for these chances so far." He suggested, "Since social responsibility is emphasized over financial performance for public officials or public institution employees, productivity or efficiency can sometimes be overlooked if work is done too conservatively. It would be good to develop the system in various ways, such as absorbing non-regular workers through subsidiaries to stabilize employment while leveraging the nature of the work."

Kim Mo (35), a team leader at a public enterprise, said, "The issue at Incheon International Airport, where a significant number of converted regular employees initially only requested direct employment but later might use collective bargaining rights to demand wages equal to regular employees, could apply to other public enterprises as well," expressing concern. He added, "If non-regular workers are converted to regular employees without a clearly fair hiring process recognized by everyone, it will increase confusion by intensifying the relative deprivation felt by both regular employees and job seekers."

◆Distortion of the labor market... Concerns over 'No-No Conflict' (labor union conflicts between regular and converted workers)= Public enterprise employees interviewed by Asia Economy on the 25th lamented that side effects are appearing everywhere due to the rapid regularization of non-regular workers. As seen in the case of Incheon International Airport Corporation, the stronger the government pushes for regular employee conversion, the more conflicts within public enterprises expand, raising the barriers between regular and non-regular employees.

Experts worry that forced regularization of non-regular workers will distort the labor market. They believe that rising labor costs will worsen public enterprise management, and if converted regular employees demand seniority-based pay, dissatisfaction among regular employees will explode. Furthermore, the public enterprise market is essentially a monopoly with little competition. If public enterprises do not innovate themselves and output decreases relative to input, the burden on taxpayers will increase.

Professor Lee Byung-hoon of Chung-Ang University diagnosed, "No-no conflicts between regular employees and converted regular employees are a feasible scenario. If the workplace operates under multiple union systems without resolving their relationships well, various complex problems may arise." Professor Geum Jae-ho of Korea University of Technology and Education pointed out, "If only non-regular workers' wages increase without reducing regular employees' wages, labor costs will rise, and consumers may suffer." Bae Gyu-sik, president of the Korea Labor Institute, said, "When converting non-regular workers to regular employees, competitive recruitment should be conducted for jobs preferred by young people. Although it is true that the proportion of non-regular workers is too high and labor polarization is severe in our society, it is unreasonable to accept demands from converted regular employees to increase seniority pay or guarantee wages equivalent to regular employees."

◆Youth Employment Opportunities Narrow Due to COVID-19= The bloating of public enterprise personnel is also narrowing the entry points for young people seeking new jobs. The recent noise surrounding Incheon International Airport Corporation ultimately points to the fundamental problem of high youth unemployment. An analysis of the Statistics Korea's Economically Active Population Survey shows that the youth unemployment rate, which was 7.9% in 2010, rose to 8.9% last year.

Compared to major OECD countries, this is also a high level. According to OECD data, over the past five years, youth unemployment rates have declined in the U.S. (4.8%), France (3.4%), and Japan (2.5%), but South Korea's rate has not dropped even by 1%. Especially due to the COVID-19 pandemic this year, youth unemployment has sharply increased. The unemployment rate, which was 7.3% at the end of last year, rose to 10.2% last month. The expanded unemployment rate for youth aged 15-29 was 26.3%, the highest since statistics began in 2015. Jung Dong-wook, head of the Employment Statistics Division at Statistics Korea, explained, "The sluggish service industry and delays in new hiring due to COVID-19 have affected youth unemployment."

There are concerns that the regularization of non-regular workers will increase labor costs in public enterprises and delay young people's entry into society. Professor Park Young-beom of Hansung University's Department of Economics said, "The regularization of non-regular workers can ultimately lead to public enterprise labor cost issues and job reductions during restructuring, which could eventually lead to no-no conflicts."

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