Economic Association: "South Korea's Labor Market Flexibility Must Increase... Job Changes and Dismissals Should Be Easier"

President of the Korean Economic Association, Professor Jonghwa Lee, Korea University

[Asia Economy Reporter Seo So-jung] Domestic economists agree on expanding the flexibility of the Korean labor market and suggest that it should be easier for existing workers to change jobs and be dismissed to achieve this.

According to a survey conducted by the Korean Economic Association on the theme of 'Labor Flexibility' on the 16th, 25 out of 31 respondents (80%) agreed that the flexibility of the domestic labor market should be expanded to increase stable jobs.

According to the association, South Korea ranked 25th among 37 OECD countries in the labor market flexibility evaluation section of the World Economic Forum (WEF).

Among the economists who answered that labor flexibility should be expanded, 17 (68%) selected 'ease of job change and dismissal for existing workers' as the most urgent area for flexibility expansion.

Professor Lee Jong-hwa of the Department of Economics at Korea University emphasized, "To respond quickly to the changing employment environment, it is necessary to increase the ease of workforce adjustment such as hiring and dismissal, as well as job adjustment, and also improve the seniority-based wage system."

However, Professor Ahn Jae-bin of Seoul National University mentioned, "Ultimately, making it easier for existing workers to change jobs and be dismissed will enable companies to actively create new jobs, but expanding social safety nets for dismissed workers should be a prerequisite."

On the other hand, Professor Lee Cheol-in of Seoul National University said, "Labor market flexibility does not necessarily mean easy dismissal," adding, "Rather, it is necessary to reduce policy interventions that hinder flexible labor market movements, such as excessive expansion of the public sector, wage increases in the public sector, and unnecessary government intervention, and operate in a way that increases labor and job opportunities for vulnerable groups who need support."

As factors lowering the flexibility of the Korean labor market, 'labor unions' received the most responses with 10, followed by regulations on layoffs (6), and policies to convert non-regular workers to regular workers (4).

Professor Heo Jeong of the Department of Economics at Sogang University argued, "In today's intensified global competition among companies to acquire new technologies, the role of labor unions must also change to fit this reality."

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