"Cargo Solidarity Strike, Government Must Actively Mediate"…Considering Business Costs and Workers' Income

Accurate Analysis Needed on Changes in Management Costs and Worker Income

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Amid the ongoing general strike by the Cargo Solidarity Headquarters of the Korean Public Service and Transport Workers' Union (Cargo Solidarity), opinions have emerged from academia emphasizing the need for the government's active mediation role. There is also a forecast that the government's response at the beginning of its term will determine its future relationship with the labor sector.

According to academia on the 12th, Professor Kim Daejong of the Department of Business Administration at Sejong University recently published a paper containing these views at the Korean Academic Society of Business Administration.

Professor Kim stated, "The government must actively mediate the Cargo Solidarity strike. The Safe Freight Rate System will expire in 2022." He added that South Korea, with the world's second highest trade dependency at 80% and ranked fifth globally in manufacturing, is facing a major crisis due to the logistics strike.

The Cargo Solidarity launched a general strike on the 7th, demanding the abolition of the sunset clause of the Safe Freight Rate System and an expansion of applicable items. The Safe Freight Rate System is a policy that publicly announces the minimum freight rates paid to cargo truck owners and transport operators to improve the working conditions of freight transport workers who frequently experience overwork, overloading, and speeding, and to ensure cargo truck safety.

According to the Korea Transport Institute, due to the Safe Freight Rate System, the income of cement cargo truck owners nearly doubled from 2 million KRW in 2019 to 4.24 million KRW in 2021. Monthly working hours also decreased by 5%, improving practices of overwork, speeding, and overloading.

Additionally, with the Ukraine war causing oil prices to surge by 50% and inflation by over 5%, the Korean economy is facing a crisis. South Korea's food self-sufficiency rate stands at 40%, and only about 100 days' worth of oil reserves are stockpiled.

Professor Kim argued, "The union should not engage in illegal acts that obstruct the operation of other logistics vehicles. Employers and workers must abide by laws and principles," and "The government should also introduce a cost-linked system that reflects fuel price increases in transportation costs."

Finally, he added, "Protecting the lives and safety of the people is the government's most important role. To overcome the difficult economic situation, labor and management must be led toward coexistence," and "After accurately grasping the current status of management costs and workers' income changes due to the Safe Freight Rate System, alternatives must be prepared."