[President Yoon's Inauguration] Flexible Working Hours, National Pension Reform... 'Priority Tasks'

Minister of Employment Lee Jeong-sik and Welfare Minister Nominee Jeong Ho-young
Pushing for Labor Regulation Relaxation... Crucial to Mediate Labor Conflicts
Jeong Ho-young's Parliamentary Approval Delayed... Pension and Other Issues Accumulate

Jung Ho-young, Minister of Health and Welfare Nominee [Image source=Yonhap News]

In the Yoon Seok-yeol administration, issues in the employment and welfare sectors such as job creation, flexibilization of the 52-hour workweek, and pension reform are piling up, so interest in related policies is expected to be high. Lee Jeong-sik, the Minister of Employment and Labor who will lead overall employment and labor policies, is a labor expert who has been involved in the labor sector for 30 years. He served as the Secretary-General of the Korean Federation of Trade Unions and has extensive experience in labor-management affairs as the Secretary-General of the Korea Labor Foundation. Since President Yoon repeatedly emphasized the need to ease labor regulations during his candidacy, Lee is expected to play an important role not only in fulfilling campaign promises but also in mediating conflicts between labor and industry.

Immediate key tasks include expanding workers' choice of working hours and reforming the seniority-based wage system, which are included in the national agenda. Although not included in the national agenda, the differentiated application of the minimum wage by industry, which is expected to be pursued mid- to long-term by the new government, faces strong opposition from labor and is a challenging task. In particular, Minister Lee must also lead efforts to supplement the Serious Accident Punishment Act, which has strong demands for improvement from the business sector, and establish a voluntary safety management system. President Yoon appointed Kwon Ki-seop, Director of the Occupational Safety and Health Headquarters at the Ministry of Employment and Labor, who was in charge of the Serious Accident Punishment Act until recently, as the Vice Minister of Employment and Labor to strengthen this effort.

Other challenges for Minister Lee include creating customized jobs, resolving labor-management conflicts, and strengthening the employment safety net. Although he mainly represented labor’s views on these issues in the past, since his appointment as minister, he has shown a more conciliatory stance by stating that he will "listen sufficiently to both labor and management opinions."

Minister of Employment and Labor Lee Jeong-sik Photo by Yonhap News

Jeong Ho-young, the nominee for Minister of Health and Welfare, who was at the center of controversy during the confirmation hearing, currently has a high possibility of being appointed due to President Yoon’s strong will. Jeong is a health and medical expert specializing in surgery. Jo Gyu-hong, regarded as a financial expert, was appointed as the First Vice Minister of Health and Welfare, overseeing welfare and related areas, and Lee Gi-il, Director of the Health and Medical Policy Office, was appointed as the Second Vice Minister to lead health and medical policies. However, the biggest challenge for the Ministry of Health and Welfare is expected to be pension reform. The National Pension is predicted to be depleted by 2055, and President Yoon has consistently emphasized the need for pension reform since his candidacy.

Pension reform is also a major part of the national agenda. The Yoon Seok-yeol administration included "sustainable welfare state reform" among its 110 national tasks. It stated that it will enhance the sustainability of the National Pension and ensure stable retirement income. Ahn Cheol-soo, the chairman of the transition committee, also declared plans to reform the National Pension’s contribution rate and payout rate by adopting a "pay more, receive less" approach.

However, opinions are divided on whether Jeong, who has only gained experience in the health and medical field, is the right person to lead pension reform. Pension reform is a politically burdensome issue. Since the burden of insurance premiums paid by the public will increase and various interests conflict, discussions themselves are difficult. Therefore, even if a vice minister with expertise in pensions assists, concerns remain that it will not be easy. In 2007, then Minister of Health and Welfare Yoo Si-min resigned after pension reform stalled.