South Korean trade unions plan to launch a series of coordinated strikes starting this week to protest the government’s implementation of a performance-based salary and termination system. The measures are part of a comprehensive labor market reform initiative the Park Geun-hye government introduced last year. Labor unions have criticized the government’s plan as it subjects public sector workers to arbitrary performance evaluations and empowers employers to target labor leaders for termination. The upcoming strikes, potentially the largest strike action in South Korean labor history, are expected to immobilize rail and subway service across the country and disrupt operations at banks and public hospitals save emergency and essential services.
Wolsan Liem, the international director of the Korean Public Service and Transportation Workers Union (KPTU), writes the following article on the background and demands of the upcoming strikes.
2016 has brought increased polarization across South Korean society. On the one hand, the South Korean government has sought to force through policies aimed at strengthening the U.S.-Korean military alliance in the region and shoring up falling profits for private capital in the midst of a worsening economic crisis. At the same time, it sought to avoid or actively stifle debate on these issues. The government’s policies are actively supported by right-wing organizations, often receiving financial and political support from the government, and in the economic arena, driven by the chaebols (large conglomerates) that dominate the Korean economy.
On the other, a widening group of workers and other ordinary Koreans are increasingly revolting against the government’s unilateral and undemocratic actions and attempts to force the public to shoulder the burden of increasing political, military and economic crisis. Since last year, the Korean Confederation of Trade Unions (KCTU) has been at the centre of this conflict and at the forefront of a movement challenging the retreat of social and political democracy in South Korea. KCTU has been involved in coalitions working on many of the issues so far reported in the Zoom in Korea blog, such as the deployment of the Terminal High Altitude Area Defense (THAAD) missile defense system in Korea and the fight for justice for the victims of the Sewol Ferry Accident. As a trade union national centre, however, the KCTU’s primary struggle naturally involves policies that impact the heart of the Korean economy and the everyday lives of workers.
Faced with a decrease in exports and domestic demand, capital and the government have sought a labor market reform policy since last year that would expand precarious low-wage employment, make it easier to fire workers, lengthen legal working time and cut overtime pay and unemployment benefits. Entering 2016, structural adjustment in the private sector in areas such as shipbuilding and construction has been added to this plan. In addition, the government has mounted a new privatization offensive seeking to greatly expand private involvement in the rail and energy sectors. These policies are all aimed at shoring up profits for chaebols at the expense of workers, who will pay with their job security or by accepting lower wages and longer hours while paying more for public services.
Since last year, the KCTU and its affiliated industrial unions have mounted an aggressive campaign against the government’s regressive labor reform package, which hit a first climax on November 14, 2015 when over 100,000 workers and other Koreans participated in a mass demonstration. The KCTU’s struggle continues this year around the five major demands of (1) reversal of regressive labor reforms, (2) guarantee of fundamental labor rights for all, (3) implementation of a 10 thousand won (roughly 10 US dollar) minimum wage, (4) chaebol responsibility for workers in their supply chain and tax justice, and (5) reduction of working time.
These demands are significant as a bold challenge both to the government’s current policies but also to the fundamental problems of the Korean economy – namely the excessive domination by chaebols, which make use of widespread subcontracting chains to exploit a largely low-paid precarious workforce, who work more hours per year than workers in any other OECD country save Mexico. In connection to these demands, the Korean Metal Workers’ Union (KMWU) has staged a series of strikes over the past two months, focusing specifically on the issues of structural adjustment in the shipbuilding sector and calling for chaebol reform.
The Struggle in the Public Sector
The next front in this fight is likely to be the public sector. The largest public sector (state-owned enterprises) strike in the history of the Korean labor movement is expected to take place at the end of September, led by the KCTU-affiliated Korean Public Service and Transport Workers’ Union (KPTU) and involving several other public sector unions. After losing its majority in the National Assembly in general elections held in April, the ruling New Frontier Party has focused its labor reform plan on the public sector, where it can push reforms through government directives rather than legislation. In particular, in addition to opening the rail and energy sectors to private investment and profit, the government seeks to impose a discriminatory performance-related salary and termination system on public sector workers with the intention of expanding the system to the private sector once it has been adopted by public institutions. Thus, the public sector has become the frontline in a wider attack on the whole working class, and the public sector strike will be a main point of mobilization for the whole KCTU.
Main Demands to the Korean Government
- Stop forcing the implementation of the performance-related salary and termination system on public institutions and respect the right of public sector employers and unions to negotiate freely on wage systems. Acknowledge and nullify illegal activities that have been used to force implementation and hold those responsible accountable.
As part of the wider package of labor reforms that would cut wages and expand precariousness for all workers, the government announced directives for the implementation of a performance-related salary system and termination of low performers throughout the public sector in the beginning of 2016. By law, changes in salary systems and other workplace rules require employee and union consent. Public sector employers, however, have used every means possible, including threatening and forcing workers/union leaders to agree or illegally passing resolutions through boards of directors without consent, to implement the system and avoid government penalties.
According to research conducted by the Public Services International Research Unit, the Korean performance-related salary system is ‘a worst case example’ and will have a detrimental impact on public services and public safety by pushing public sector workers to take on a profit-orientation and compete with one another instead of cooperating towards the provision of quality public services. The performance-related salary and termination system is also a means to weaken trade unions, because it will reduce the union’s ability to bargain on wages and discriminatory performance evaluations can easily be used to target union members and officers.
- Use funds currently being offered as an incentive to public institutions who introduce the system (1.68 trillion won / 1.6 billion USD) to enable direct employment of subcontracted public sector workers and improve the conditions for precarious workers.
The Korean government controls the budget for personnel costs at all public institutions. As a means to pressure institutions to introduce its pay and termination system, the government announced extra incentive pay for those institutions that introduced the system early, and a freeze in wages at institutions that failed to introduce the system by the end of the year. KPTU members are refusing this money and returning the incentive pay they have received. The union is calling for this money to be used to improve conditions for precariously-employed workers and hire all subcontracted workers as in-house workers.
- Repeal of government plans for privatization in the rail and energy sectors
The government is pursuing plans to expand the involvement of chaebols in the rail and energy sectors and create a new public institution that will be in charge of investment of the national pension fund. These plans will mean increased profits for the chaebols while the public suffers from decreased pension coverage, increased transport fares and energy prices, decreased access and risks to safety. The Korean public is highly opposed to privatization, and thus the government is using terms like ‘adjustment of functions’ and ‘strengthening of private investment’ for its plans and seeking to roll them out through directives rather than legislation in order to avoid public debate.
On July 6, the government announced plans to open the rail infrastructure market (construction and operation of tracks) to private capital and attracted 19.8 trillion won (roughly USD 19 billion) in private investment for the construction and operation of new lines planned throughout the country. Under the new plan, private infrastructure operators would be able to collect track-use charges and receive other benefits to ensure profits. The KPTU Korean Railway Workers’ Union (KPTU-KRWU) and industry experts predict privatization of rail infrastructure will lead to increased fares, greater safety risks and put the public rail operator (the Korail) into deeper debt. Following a 23-day long strike by the KPTU-KRWU in 2013, the government’s privatization plans were effectively halted until this year.
In June, the Korean government announced plans for ‘adjustment of functions’ in the energy sector, which essentially calls for the increase of the involvement of chaebols throughout the sector. The government’s plan includes fostering the involvement of private companies (chaebols) in gas import, electricity sale and distribution, thermoelectric power plants maintenance and nuclear power plant design. It also involves the listing of public power companies on the stock market to allow for partial private ownership. Analysis by unions and experts demonstrate that these measures will lead to privileging of energy supply to large corporations and therefore exacerbate supply instability, increase prices for the general public and worsen the safety risks at generation facilities.
- Work with unions and civil society for positive reform of the public sector
The KPTU and other public sector unions are calling on the government to engage in social dialogue about the above public sector policies and discuss a new vision for public sector reform that guarantees the provision of accessible and affordable quality public services and protection for workers’ conditions and rights. In particular, this vision should focus on increased employment for young people in the public sector and direct employment of workers doing permanent and safety-related jobs, democratic government of public institutions and the introduction of an evaluation system based on service provision as the main criteria.
The public sector industrial action is expected to begin on September 27 and is planned as a full, national and unlimited strike, expected to involve over 60,000 KPTU members in rail, subway, healthcare, national healthcare service, national pension service, gas and other sectors. All KPTU affiliates will respect minimum essential service requirements (leaving a percent of the workforce on the job required to maintain essential services). KPTU affiliates (public and private sector) who have not gained the legal right to strike will participate in protests and other actions through legal means.
The KCTU and its other affiliates will also organize a mass mobilization on September 28. One-day strikes will also be held by the Korean Financial Industry Union (affiliate of the Federation of Korean Trade Unions) on September 22, the Korean Public Industry Trade Unions (FKPIU) (FKTU affiliate) on September 22, and the Korean Health and Medical Workers’ Union (KHMU) (KCTU affiliate) on September 28.
Expected Union Repression
Since the People’s Mass Mobilization on November 14, 2015, repression against trade unions has been intense. Despite the police’s extensive use of roadblocks, water cannons and capsaicin, which landed at least one protester, farmer Baek Nam-gi, in critical condition, the courts have exonerated the police of any wrongdoing while convicting hundreds of trade unionists and other participants on criminal charges. On July 4, KCTU President Han Sang-gyun was sentenced to five years in prison on charges including obstruction of traffic, obstruction of public business and violations of the law on assembly and protests. On July 26, KPTU Vice President Cho Sung-deok was sentenced to three years on similar charges. A KPTU delegate and three KCTU officers have also been imprisoned.
This repression is expected to continue. It is likely that the government and police will declare the September strike illegal on the grounds that the demands are ‘political’ and seek criminal charges and penalties for trade union leaders and activists.
Significance of the Public Sector Strike
If it goes forward as planned the September public sector strike will be the largest ever in the history of the Korean labor movement. It will not, however, be the first. Joint public sector strikes, which involve workers in the rail and energy sector have occurred twice before, once in 2002 and once in 2009. These strikes were successful in stopping an earlier privatization policy and attempt at introducing performance-related pay and other liberalization measures respectively. They were also significant in expanding public awareness about keeping public services in public hands and operating public institutions with the goal of serving the public good rather than the pursuit of profit. Further, these strikes helped to develop solidarity among public sector workers in different industries and enable them to play an increasingly central role in South Korea’s democratic labor movement and the broader movement for social change.
The public’s understanding of the importance of the public sector and class consciousness among public sector workers have developed in tandem, but there is still a difficult road ahead. The government has mounted a massive propaganda campaign, which paints privatization as ‘improvement’ and public sector workers as a high-paid labor aristocracy trying to hold onto wages and benefits while ordinary people suffer in the current economic crisis. At the same time, the public sector has become more complex with outsourcing leading to an increased number of precarious low-wage workers working alongside the traditional permanently-employed workforce in public institutions.
In the upcoming strike, the KPTU and other public sector unions face the dual challenge of explaining to the public how the government attack on public sector workers and its plans for ‘improvement’ will actually erode the quality and accessibility of public services on the one hand, while also uniting low-wage precarious and high-paid permanent workers on the other. If successful, public sector workers will contribute significantly to a victory in KCTU and the broader fight to reverse the retreat of social and economic democracy underway in South Korea.
By Wol-san Liem, international director of the Korean Public Service and Transportation Workers Union (KPTU)
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