[The Editors' Verdict]A 52-Hour Workweek Without Evenings or Income

Ignoring the desperate pleas of small and medium-sized enterprises (SMEs), the government will enforce the 52-hour workweek starting in July. According to the Bank of Korea's May Business Survey Index (BSI), the gap between large corporations and SMEs widened to 30 points during the COVID-19 pandemic, marking the largest disparity since statistics began in 2003. Nevertheless, the legal working hours for micro-enterprises with fewer than 50 employees will be reduced by nearly 25% all at once. Since about 90% of Korean companies and 80% of workers belong to businesses with fewer than 50 employees, the side effects of enforcing the 52-hour workweek will inevitably be greater for SMEs than for large corporations. While large corporations have compensated for reduced legal working hours through automation and other means, SMEs are not in a position to do so. SMEs lack capital and find it difficult to replace labor with automation. Additionally, securing foreign labor has become more difficult due to COVID-19, ultimately forcing micro and small enterprises to downsize or cease operations because of the 52-hour workweek.

With the expansion of the 52-hour workweek, workers in micro and small enterprises face not only a life without evenings but also a life without income. During COVID-19, high-income groups saw their earnings increase, while low-income groups experienced a decrease. On top of this, the enforcement of the 52-hour workweek will increase unemployment in small enterprises and reduce workers' incomes. The government promoted the idea that reducing working hours would increase jobs, but the opposite occurred. Productivity should have increased proportionally to the reduction in working hours, but it did not. Since SME wages are less than half those of large corporations, workers avoid employment in SMEs despite the job shortage, leading to higher unemployment rates. Low-wage workers who avoid unemployment face longer total working hours and struggle to maintain their income. The average monthly income of workers in businesses with fewer than 50 employees, including overtime pay, is just over 3 million won, but with the 52-hour workweek reducing working hours, it falls below 2.5 million won, prompting workers to take on part-time jobs to make up the difference.

The 52-hour workweek, which disregards the realities of industry and labor, is populism. The sweet temptation of creating a life with evenings and increasing jobs infringes on the economic freedom of both employers and workers. It also deepens employment and income polarization, worsens quality of life disparities, and pushes low-wage workers into a life without income. Because the productivity gap between large corporations and SMEs in Korea is so vast, a uniform reduction in legal working hours causes many side effects. Applying the standard set by large corporations directly to SMEs makes it difficult for SMEs to keep up, ultimately reducing workers' incomes. To reduce working hours and improve quality of life, comprehensive and meticulous new policies are needed. Countries with short working hours and high quality of life invariably have high productivity. To increase productivity so that income does not fall despite reduced working hours, the government must support SMEs in utilizing digital technologies, improve the quality of vocational education and training, and expand opportunities.

Improving productivity takes time. Meanwhile, the government must urgently implement supplementary measures to address the shock of the 52-hour workweek. Since conditions vary by company size and industry, flexible operation should be allowed by broadly permitting special extended working hours. Businesses with fewer than 50 employees should be divided by size, allowing more flexible working hour systems for smaller enterprises, those with high dependence on foreign labor, or industries requiring concentrated work. The 52-hour workweek may be a political trophy for the administration, but it destroys jobs for low-wage workers and lowers their quality of life. Although belated, supplementary measures must be taken now to avoid the disgrace of being labeled a 'polarization regime.'

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