Son Kyung-sik, Chairman of the Korea Employers Federation, "Policies That Boost Corporate Morale Must Be Actively Implemented"

Son Kyung-sik, Chairman of the Korea Employers Federation (left in the photo), is speaking at the '2021 Economic Policy Direction Meeting with Heads of Economic Organizations' held on the 4th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Kiho Sung] Sohn Kyung-shik, Chairman of the Korea Employers Federation (KEF), met with Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, on the 4th to request strengthened support for companies struggling due to the COVID-19 pandemic.

Chairman Sohn attended the '2021 Economic Policy Direction Economic Organization Leaders Meeting' held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, and stated, "This year, the unexpected COVID-19 pandemic has caused a global economic and employment crisis. Our economy is also facing negative growth for the first time in 22 years since the 1998 foreign exchange crisis (-5.1%)." He then presented five proposals.

First, regarding the reduction of working hours, Sohn said, "The flexible working hours system should be legislated as agreed by labor, management, and government at the Tripartite Commission. To ensure the success of the K-New Deal policy and strengthen competitiveness, the application period of the selective working hours system, which can be used in the R&D sector, should be extended from the current one month to three months or more." He also requested, "Until legislation to improve the flexible working system is enacted, the guidance period for small and medium-sized enterprises should be extended, and the implementation of the 52-hour workweek system for micro-enterprises with fewer than 50 employees should be considered for postponement."

Regarding the K-New Deal, he said, "If a 'public-private consultative body' is formed to share real-time information and resolve field difficulties, many companies will increase their interest and actively participate, which will contribute to enhancing the outcomes of the New Deal policy." He added, "Since there are plans for active investment and job creation in new industries such as future cars and renewable energy, efforts should also be made to actively foster and supply the necessary workforce on site."

On tax reform, Sohn urged improvements to inheritance tax and corporate tax, which are disadvantageous compared to competing countries, to encourage companies to make active investments. He said, "The highest inheritance tax rate should be lowered to meet global standards to secure business continuity rather than 'wealth inheritance.'" He also requested, "Please lower the highest corporate tax rate and abolish the minimum tax system so that our companies can strengthen their international competitiveness."

Regarding regulations on online operations of large retail companies, Sohn pointed out that inefficient non-face-to-face regulations still exist in the distribution industry and need improvement. He said, "Currently, large retail companies face difficulties in operations because online delivery is prohibited during mandatory closing days and hours of their stores." He added, "Since such regulations are unfair compared to other retailers operating only online, please take measures to allow online delivery by large retail companies without restrictions during mandatory closing days and hours."

On policy speed adjustment, Sohn said, "To enable our economy to recover 'faster and bigger' than competing countries, the government should boost economic vitality by supporting companies' momentum." He emphasized, "For this, policies that increase corporate burdens, such as amendments to the Commercial Act and the Fair Trade Act, should be reviewed from a mid- to long-term perspective after our economy has completely overcome the COVID-19 crisis."