May 6, 2017 3:30 am JST

South Koreans feel strain as labor inequality deepens

Resentment at unequal treatment of irregular workers simmers ahead of election

SOTARO SUZUKI, Nikkei staff writer

A dismissed contract worker protests outside a Hyundai Motor plant.

ULSAN, South Korea -- A man sat in protest outside the gates of Hyundai Motor's factory on a recent day here in this industrial southeastern city. Next Tuesday, when South Koreans head to the polls to elect a new president, will mark a year to the day when he was locked out. 

The man was a so-called irregular worker -- a category including temporary, contract and part-time laborers -- and had joined a union of his peers seeking full-employee status. Instead, he said, he had his entry pass revoked. "I want our next president to create a society where irregular work doesn't exist," he said.

The election takes place amid simmering frustration over disparities in pay and working conditions between full employees and the irregulars who now make up a third of all workers.

Hyundai's official union is a force to be reckoned with. Workers strike almost every year, demanding and receiving sizable pay hikes. Hong Joon-pyo, the conservative Liberty Korea Party's candidate for president, has blasted union members for "striking every year, even while pulling in salaries of 100 million won ($87,000)," and pledged to shake up "aristocratic" unions. Liberty Korea is the party formerly known as Saenuri, which had been led by ousted President Park Geun-hye.

"Is 100 million won really too much for an employee that has worked 2,000 hours annually for 30 years?" union spokesman Jang Chang-yeol retorted.

The unlucky many

Yet this dispute concerns only regular workers at major companies -- a small slice of South Korea's population. It is often said that 99% of South Korean business falls under the small-to-midsize category, and that 88% of employees work for such enterprises. For the most part, this 88% is said to labor long hours for low pay.

"Workers at primary subcontractors are paid 60% of what regular [Hyundai] employees are for the same job," said the chief of a division within the Hyundai union dedicated to irregular workers. Those at secondary subcontractors get 60% as much as those one rung up, this person added.

Labor conditions and benefits also vary markedly. "Regular workers toil in a cool, air-conditioned space, while their irregular counterparts don't even get a fan," the union official said, drawing up old memories with a faintly bitter expression. "The regular workers used to hurl insults at us, and we were forced to take on work outside our job descriptions," the official said.

Will for change

A crane collapse Monday at a Samsung Heavy Industries shipyard killed several people, casting a morbid pall over May Day, the international day of solidarity among workers. Many of the victims worked for a Samsung subcontractor, according to South Korean media. Moon Jae-in, the presidential candidate backed by the leading opposition Democratic Party of Korea, denounced the incident in a televised address Thursday, saying the victims' pain is shared by South Korea's "7 million irregular workers and subcontractor employees."

South Korea's irregular worker population began to swell following the country's 1997 currency crisis, which prompted companies to undertake extensive restructuring. Now, that group makes up 33% of the working population, government statistics show. The extraordinary wages top executives bring in has only fueled social discontent. Kwon Oh-hyun, Samsung Electronics' vice chairman and CEO, makes roughly 60 times what the average worker at the company does, for example.

The share of South Koreans describing themselves as middle class has fallen to 53% from 60% two decades ago, according to the statistics agency. Back then, only 12% saw themselves as occupying the bottom of the socioeconomic ladder; now, a full 20% do.

The South Koreans whose candlelit rallies helped oust Park are brimming with resentment at the country's deep social inequality. No definitive remedy has been advanced for what ails society. Moon has called for a law to ban discrimination based on employment status. Liberty Korea's Hong has argued that, unless companies have the freedom to fire, they cannot take on more full-timers. Voters will have their say Tuesday.

Asia300

Hyundai Motor Co., Ltd.

South Korea

Market(Ticker): KRX(005380)
Sector:
Industry:
Consumer Durables
Motor Vehicles
Market cap(USD): 37,945.6M
Shares: 285.47M
Asia300

Samsung Heavy Industries Co., Ltd.

South Korea

Market(Ticker): KRX(010140)
Sector:
Industry:
Producer Manufacturing
Trucks/Construction/Farm Machinery
Market cap(USD): 2,725.2M
Shares: 390M
Asia300

Samsung Electronics Co., Ltd.

South Korea

Market(Ticker): KRX(005930)
Sector:
Industry:
Electronic Technology
Telecommunications Equipment
Market cap(USD): 341,634M
Shares: 147.34M

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