Lee Jeong-sik, Minister of Employment and Labor, is giving a greeting at the inauguration ceremony and first meeting of the Win-Win Wage Committee held on the morning of the 2nd at the Press Center in Jung-gu, Seoul. [Image source=Yonhap News]
The government has launched the Win-Win Wage Committee to discuss measures for improving the dual structure of the labor market and reforming the wage system.
On the 2nd, the Ministry of Employment and Labor held the inauguration ceremony of the Win-Win Wage Committee at the Press Center in Jung-gu, Seoul. Minister of Employment and Labor Lee Jeong-sik and Professor Lee Jae-yeol of the Department of Sociology at Seoul National University were appointed as co-chairs.
Twelve experts, including Professor Kwon Soon-won of Sookmyung Women’s University, who served as the chair of the Future Labor Market Research Group, and seven director-level officials from seven related ministries such as the Ministry of Employment and Labor and the Ministry of Economy and Finance participated as committee members.
According to the Ministry of Employment and Labor, Korea’s wage system is strongly based on seniority. Large corporations with labor unions especially emphasize seniority. However, small and medium-sized enterprises (SMEs) lack personnel and labor management capabilities, and 61% of all businesses do not have a wage system in place.
The government views this wage system as providing excessive benefits to organized workers centered in large corporations and regular workers, while workers in SMEs and non-regular workers are not compensated according to their work, thereby entrenching the dual structure.
The Future Labor Market Research Group also recommended in December last year that reforming the wage system to ensure continued employment for the elderly, create jobs for youth, and reduce wage gaps be treated as a national task, proposing the establishment of the Win-Win Wage Committee.
The Win-Win Wage Committee will not only address wage system reform but also discuss various policy and institutional reform measures to support the improvement of the dual structure of the labor market through wages.
To realize equal pay for equal work, the committee will conduct wage gap surveys in industries where wage disparities between prime contractors and subcontractors are severe and analyze the causes. It will also analyze wage transparency policies and wage discrimination prevention policies from countries such as the United States and discuss ways to introduce them.
It will explore concrete support measures such as tax benefits for companies reforming their wage systems, and prepare a comprehensive plan called the "Win-Win Wage Expansion Roadmap" that includes measures to eliminate wage gaps and reform the wage system.
Professor Lee Jae-yeol, co-chair, emphasized, "Our labor market is structured with 12% (large corporations and regular workers) protected by labor laws and social safety nets, and 88% (SMEs, non-regular workers, etc.) excluded from protection. The dual structure of the labor market deprives youth of hope, so the committee must deeply discuss fundamental solutions."
Minister Lee Jeong-sik said, "Wage gaps are a barometer of the dual structure, and wages, which directly reflect the value of labor, are the key link to resolving the dual structure. We hope to prepare fundamental improvement measures and take a step forward toward a labor market of coexistence and solidarity."
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