May 13, 2017 5:00 am JST

Moon promises to eliminate all contract jobs in public sector

South Korean leader's push for permanent positions may clash with business

SOTARO SUZUKI, Nikkei staff writer

South Korean President Moon Jae-in shakes hands with supporters on Wednesday. © Kyodo

SEOUL -- New South Korean President Moon Jae-in promised Friday to end all contract employment in the public sector during his term, with hopes of encouraging private-sector employers to offer more permanent positions as well.

Moon made the pledge during a visit to the Incheon International Airport Corp. He called on the government and relevant agencies to review the current situation by the second half of the year and to craft a road map toward resolving the issue. The swelling ranks of temporary workers, who often make less and work under worse conditions than permanent employees, has become a nationwide problem in South Korea.

The airport operator directly employs 1,400 people. But it will also have about 10,000 contractors and subcontractors, who will staff more than 80% of Incheon Airport's operations, by the time the second terminal opens in the fall. Moon has called for them to be turned into permanent workers.

In response to Moon's comment, Incheon International Airport Corp. CEO Chung Il-young promised to convert 10,000 irregular positions into permanent ones.

One in three workers in South Korea works on a contract basis, according to the national statistics bureau. Corporations restructured in the wake of the Asian currency crisis 20 years ago, laying off employees and pushing more individuals into irregular positions. Contract workers are estimated to earn just 60% of permanent employees' pay on average -- a key factor behind growing economic inequality in the country.

Moon ran his campaign first and foremost on the promise to generate jobs. Saying the private sector on its own will not boost employment, he promised to create 810,000 new positions in the public sector. The change at Incheon Airport will be the first step.

Job creation has been a hot topic in South Korea for years. Deposed President Park Geun-hye focused on keeping the job market fluid, such as by easing restrictions on terminating employees and extending how long workers can be kept on contract. Moon is shifting the focus away from the private sector, putting the government in charge instead.

Park's Liberty Korea Party swiftly criticized Moon, arguing that South Korea must not become a country that feeds its public servants using taxpayer money. It maintains that the private sector, not the government, must take the lead in job creation.

Businesses have not openly opposed Moon's plans, but are concerned by his promises to reduce contract work and shorten hours. "Shorter hours could delay our shipments," said a small business owner. Moon's "Democratic Party of Korea tends to side strongly with unions, and the rift between workers and employers could grow."

Jobs are not the only area where Moon is reversing his predecessor's policies. On Friday, he scrapped state-issued history textbooks, which Park introduced ostensibly to correct a left-wing bias. The Democratic Party and many civil organizations had strongly opposed Park's move. Moon strongly believes that history education must not be politicized, the presidential Blue House said.

The new president is also reforming South Korea's prosecution system. He appointed Seoul National University professor Cho Kuk, a strong advocate for reforms, as senior presidential secretary for civil affairs -- a post that has wide-ranging influence over legal and administrative matters. Meanwhile, Prosecutor General Kim Soo-nam has resigned.

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