Lee Jeong-sik, Minister of Employment and Labor, "Government to Prioritize Replacement Worker Placement During Pregnancy and Childbirth" [K Population Strategy]

(48) Interview with Lee Jeong-sik, Minister of Employment and Labor
Rooting 'Work-Family Balance' from Industrial Complex SMEs
Let's Change Corporate Culture Too... "Considering Tax Benefits"
Lee Jeong-sik: "Labor Reform Is Ultimately a Solution to Low Birthrate"

Editor's NoteThe key to solving South Korea's population problem lies within companies. A workplace atmosphere that evaluates employees based on their work regardless of gender and a family-friendly culture are crucial to addressing the K-population issue. Although low birth rates result from complex factors, it is important to ensure that workplace burdens do not become obstacles that make people hesitate to have children. Asia Economy plans to visit companies leading family-friendly policies to identify the factors that helped these systems take root stably, and to explore multifaceted solutions with companies facing practical challenges. Through this, we aim to encourage change starting from companies and analyze the government's role in enabling this. We listen to voices emphasizing that company culture and atmosphere that reduce psychological burdens are more critical than financial support, and propose alternatives from various perspectives.

Lee Jeong-sik, Minister of Employment and Labor. Photo by Heo Young-han

"Starting next month, we plan to provide 'customized substitute workforce services' beginning with two major industrial complexes. This year, we will conduct a pilot project and expand it to industrial complexes nationwide by region next year."

On the 22nd, at the Seoul Jung-gu Employment and Labor Office headquarters, Minister of Employment and Labor Lee Jeong-sik, with his right eye visibly bloodshot, emphasized, "We will provide targeted and customized services to ensure that companies do not miss out on support due to lack of awareness about substitute workforce services." This solution to low birth rates was gained through his rigorous nationwide visits to industrial sites, even to the point of bursting blood vessels in his eyes.

According to the 2022 'Survey on the Utilization of Maternity Protection by Workers,' half (50.9%) of those who used parental leave or reduced working hours during childcare managed by 'resolving with existing team or department personnel.' Only 12.4% responded that they used substitute workers to cover their duties. Ultimately, using parental leave or reduced working hours is difficult because colleagues bear the burden, making workers hesitant to use these benefits. The reason is that companies must be able to promptly hire substitute workers to guarantee workers' work-family balance.

Minister Lee declared his commitment to rooting work-family balance starting from industrial complexes. Eight out of ten domestic companies are small and medium-sized enterprises (SMEs), which are especially concentrated in industrial complexes. The Ministry of Employment and Labor plans to directly engage with industrial complexes, where male workers predominate and manufacturing is concentrated, to rapidly spread work-family balance. This year, a survey on substitute workforce demand will be conducted, and based on this, customized service packages including support for substitute workforce use and consulting will be provided.

Also, starting this year, before companies or workers apply for substitute workforce support, the government plans to proactively provide guidance. Minister Lee said, "We will not just wait for employers' applications but actively utilize health insurance and employment insurance data," adding, "When a worker becomes pregnant or gives birth, the government will first arrange substitute workers." This reflects the determination to ensure no company misses out on support due to lack of awareness of the system.

During the interview, Minister Lee repeatedly emphasized that the Ministry of Employment and Labor must take the lead in solving the low birth rate issue. He is the first minister in the ministry's history to mention solutions to low birth rates in his New Year's address this year. At the Economic, Social and Labor Council meeting held for the first time in three years on the 6th, 'low birth rate' was identified as a timely challenge. Youth and women's employment policies also focused on overcoming low birth rates. This is unusual for the Ministry of Employment and Labor, where job creation, safety, working hours, and wages are typically the main agenda.

Workers in SMEs Unable to Use Parental Leave... "SME-tailored Substitute Workforce System"

Minister Lee announced plans to significantly expand working hour support policies for childbirth and childcare. Support is expected to focus more on SMEs than large corporations. Although the usage rate of parental leave among SME workers is increasing, it remains insufficient compared to large companies. According to the Ministry of SMEs and Startups, 18.49 million workers, or 81% of the total workforce, are employed by SMEs. However, the number of parental leave recipients in SMEs was 69,000 last year, only about half of the 137,000 in large companies.

Minister Lee explained, "We plan to prioritize policies that allow flexible use of working hours and reduce the burden of work gaps," adding, "We will further activate the reduced working hours system during childcare, which is widely used in SMEs." This means strengthening the reduced working hours system that allows workers to raise children while working, rather than parental leave which requires taking time off work for a certain period. Accordingly, the Ministry of Employment and Labor will expand the eligibility for reduced working hours during childcare from children aged 8 or younger (second grade of elementary school) to 12 or younger (sixth grade of elementary school). The usage period will also be extended from a maximum of 24 months per parent to 36 months.

However, when asked whether overall working hours should be reduced, he answered affirmatively. Last March, the ministry announced a working hours reform plan that sparked controversy over a '69-hour workweek.' At that time, criticism arose mainly from young people that the policy was regressive amid serious low birth rate issues. In response, the ministry proposed in November of the same year to maintain the '52-hour workweek' framework. Minister Lee said, "Working hours reform will be comprehensively discussed at the Economic, Social and Labor Council's Work-Life Balance Committee," adding, "We will discuss flexible working hours and worker health protection measures based on actual working hour reductions."

"It is Desirable for Parents to Raise Children... Employment Rules Must Change"

Some view the recently emerging policy to expand foreign domestic workers as not a fundamental solution. Minister Lee responded, "Childcare and housework are essentially different and should be viewed separately," pointing out, "Although Filipino domestic workers are suggested as an alternative, many citizens are uneasy about entrusting their children to them." He explained, "Many citizens believe it is most desirable for parents to raise their children, so even if foreign domestic workers increase, conflicts between childcare and work will continue."

Minister Lee argued that long-term changes to the Labor Standards Act are necessary. According to current law, treatment issues such as working hours are stipulated in employment rules, and changes require the consent of the majority of workers. This makes it difficult for workplaces to introduce bold working hour systems for young workers or pregnant and childbirth workers. Minister Lee said, "Even within the same workplace, workers vary in occupation and age," and added, "Employers prefer employment rules that separately regulate only some groups rather than rules that cover everyone."

He self-assessed that the budget for income support during childcare has been dramatically expanded. Minister Lee said, "What workers want is sufficient money for childcare," adding, "This year, we will invest the largest childcare support budget ever." He emphasized again, "A significant portion of the childcare support budget should be used from the general account," and "The government has a strong will to cover 16% of the increasing budget from the general account."

Lee Jeong-sik, Minister of Employment and Labor. Photo by Heo Young-han

Minister Lee viewed 'infrastructure support' as urgent policy for employers. Some companies want to introduce flexible working systems aimed at family-friendly management but cannot implement them due to lack of funds. He explained, "When meeting entrepreneurs on site, they also say they face difficulties using work-family balance policies," adding, "To take parental leave, work from home, or selective work, infrastructure must be established, and many appeal for government support at this stage."

However, he acknowledged the limitation that "it is difficult to apply family-friendly management systems such as flexible work to all companies." This is because very small companies or industries where production varies with the number of employees may experience productivity declines with flexible work. Minister Lee said, "We prioritize autonomous agreements and choices between labor and management by company," but also proposed, "We will select 400 companies without flexible work experience and provide consulting annually to assist them." The number of companies supported for flexible work infrastructure will increase from 50 to 850, and the support amount will rise from 700 million KRW to 2.7 billion KRW.

"Culture Must Change Together, Considering Tax Benefits"

Minister Lee stressed that cultural change is as important as support policies. While guaranteeing time and income to balance work and childcare is important, a culture where pregnancy and childbirth are freely chosen must be established. His slogan for the Ministry of Employment and Labor this year is "Now, it's about culture." He said, "Just as it is widely accepted culture that smoking is prohibited in restaurants, work-family balance must be recognized as a natural culture in our labor market," emphasizing, "We must eliminate cultures of sexual harassment, sexual assault, and bullying, as well as wage gaps between men and women, job discrimination against women, and exclusion from promotion."

To spread corporate culture, he promised to increase benefits for companies excelling in work-family balance. He also emphasized considering tax incentives, which companies prefer most. Minister Lee said, "The most important thing in corporate culture is the awareness and will of leaders," adding, "To induce more autonomous changes in companies, we will work with related ministries to expand incentives such as tax benefits, grants, government support projects, and policy fund support for excellent companies."

He also pledged to create an environment where not only company leaders but also workers do not feel pressured. Minister Lee explained, "Most companies solve work gaps by having colleagues cover the work," adding, "It is common that workers hesitate to use reduced working hours during childcare because they worry about increasing their colleagues' workload." To prevent such situations, a kind of colleague support allowance will be paid in the second half of this year. If an employer provides certain compensation to employees whose workload increases due to reduced working hours during childcare, the government will provide 200,000 KRW per month.

"Labor Reform is Ultimately a Solution to Low Birth Rates... Failure Will Cause Harm"

Minister Lee argued that policies traditionally promoted by the Ministry of Employment and Labor are not unrelated to solving low birth rates. He believes that quality jobs must be the foundation for workers to engage in childbirth and childcare. He said, "When the ministry started labor reform, the first thing was labor-management rule of law," adding, "Narrowly, childcare support is a solution to low birth rates, but broadly, eliminating sexual harassment and discrimination and preventing wage arrears are also low birth rate policies."

Minister Lee mentioned 'resolving the dual structure' as a solution to population issues for this reason. He questioned, "Isn't a good job one where you don't work long hours, get good pay, and have your basic rights well protected?" and explained, "Good jobs like those in large companies and the public sector are limited in number." He continued, "Most employment comes from SMEs, but their workers lack protection from labor unions and organizations," emphasizing, "It is important to resolve the dual structure of the labor market and create quite decent jobs."

He warned that if the birth rate does not rebound, the country will face a 'shrinking society' and the economy will contract. This is why the Ministry of Employment and Labor, the main ministry for jobs, has rolled up its sleeves to tackle low birth rates. According to the Organisation for Economic Co-operation and Development (OECD), South Korea's labor population is shrinking, and real GDP per capita is expected to decrease by more than 15% by 2050. Minister Lee warned, "The decline in the working-age population may lead to reduced overall economic investment and decreased labor market vitality," adding, "Starting with the damage to SMEs and local areas struggling to find workers, the foundation of our country's economic growth is likely to weaken."

He also expressed concern that competition over jobs could become excessive. Minister Lee said, "Competition could escalate into conflicts and confrontations across social strata, generations, genders, and regions," and predicted, "This will threaten social stability at its core and act as a vicious cycle mechanism that reduces overall economic vitality."

Special Coverage Team 'K-Population Strategy - Gender Equality is the Answer'

Reporters Yuri Kim, Hyunju Lee, Hyunjin Jeong, Aeri Bu, Byungseon Gong, Juni Park, Seungseop Song
Editor Pilsoo Kim, Economy and Finance