Labor, Management, and Government Meet After Two Months... KCTU Says "Retirement Age Issue Needs Public Discussion"

Labor, Management, and Government Meet Again Since January
Discussing Solutions to the Dual Structure of the Labor Market
KCTU: "No Return to ESLC Dialogue"
"Public Opinion Survey Needed on Retirement Age Issue"

On the 26th, labor, management, and government representatives met for the first time in over two months to hold a forum aimed at diagnosing problems in the Korean labor market and seeking solutions. At this meeting, discussions emerged emphasizing the need for productivity improvements in response to population decline and aging. There were also calls for reforming the wage system and expanding the adoption of flexible working hours to improve labor market efficiency. The discussion also included the necessity of wage information disclosure to resolve the dual structure of the labor market.

With the Korea Confederation of Trade Unions (KCTU) appearing at the event, attention focused on the possibility of resuming social dialogue through the Economic and Social Labor Council (ESLC), but the KCTU stated, "The forum does not signify a return to ESLC meetings." Regarding the reform of the retirement age system, which has become a significant social issue, they expressed the opinion that public deliberation is necessary.

Kwon Ki-seop, Chairman of the Economic, Social and Labor Council, is delivering the opening remarks at the grand forum titled "Solutions for the Transitional Labor Market and Labor-Management Relations, and Social Dialogue" held on the 26th at the Korea Federation of SMEs in Yeongdeungpo-gu, Seoul. Photo by the Economic, Social and Labor Council

The ESLC, a presidential advisory social dialogue body, along with the KCTU, Korea Employers Federation, Ministry of Employment and Labor, and Korea Labor Institute, jointly hosted the "Labor Market and Labor-Management Relations Solutions in Transition, and Social Dialogue Grand Forum" at the Korea Federation of SMEs in Yeongdeungpo-gu, Seoul.

This forum was held to diagnose the problems facing the Korean economy and the realities of the labor market and to seek solutions. Its purpose was to propose a new paradigm shift to address the important challenges of our time and to deeply discuss the role and future vision of social dialogue. It was also the first meeting of labor, management, and government representatives in over two months since the forum on continuous employment held by the ESLC in January.

"A wage system based on job roles is necessary... The public sector should lead the way"

Seong Jae-min, Deputy Director of the Korea Labor Institute, presented on the topic "Strategies to Respond to Complex Crises such as Low Growth, Population Decline, Climate Crisis, and Industrial Transition." Deputy Director Seong emphasized that overcoming the era of complex crises requires productivity improvements through artificial intelligence (AI) and that labor systems must be changed accordingly. He argued that to increase labor market efficiency amid population decline and aging, the wage system should be reformed and the adoption of flexible working hours expanded.

Seong stated, "The main reason for Korea's low labor hour productivity is the lack of flexible use of working hours and sufficient rest practices," and pointed out, "A transition in the working hours system in this direction is necessary." He also emphasized, "Systems that grant workers significant choice over their working hours and locations have been shown to increase birth rates."

Park Yoon-soo, an economics professor at Sookmyung Women's University and a discussant, said, "Wages should more actively reflect workers' capabilities and performance rather than company size or years of service." He explained, "For this, reforming corporate wage systems is important, but more fundamentally, labor market mobility should be activated to expand opportunities for workers to move to better jobs based on their capabilities and performance."

Another presenter, Park Cheol-sung, a professor in the Department of Economics and Finance at Hanyang University, analyzed the current situation in Korea under the theme "Solutions to Resolve the Dual Structure of the Labor Market." He proposed measures such as wage information disclosure, improving the operation of worker representative systems to reduce disparities, and expanding flexible stability to promote upward mobility of workers. He also highlighted the challenge of creating a labor market where workers receive fair compensation and enjoy rights regardless of employment type while accommodating new forms of employment.

Professor Park explained, "a wage system based on job roles, rather than wage determination by employment type or personal attributes, is necessary." He added, "It is necessary to lead the way by introducing this first in the public sector," and "When introducing it, it is important not just to make the wage system appear as if it is job-based but to demonstrate a model where the personnel management system is consistent with the job-based wage system." He also mentioned, "A wage information infrastructure is needed to expand the job-based wage system."

Discussant Eom Sang-min, an economics professor at Kyung Hee University, said, "Wage information is disclosed to reduce wage gaps, but there is a different effect between information about people doing similar work to oneself and market information." He continued, "The former reduces wage gaps, but the widened wages do not converge in the middle; rather, the higher wages decrease," adding, "On the other hand, providing market information raises workers' wages through competition among companies and facilitates effective allocation."

On the 26th, the 'Labor Market Transition, Labor-Management Relations Solutions, and Social Dialogue Grand Debate' took place at the Korea Federation of Small and Medium Business in Yeongdeungpo-gu, Seoul. Photo by Kim Pyeonghwa

KCTU: "Retirement age discussions should be approached through public deliberation"

After suspending participation in social dialogue within the ESLC following the emergency martial law incident in December last year, the KCTU's attendance at this grand forum sparked interest in the possibility of resuming dialogue. However, the KCTU drew a clear line, stating, "Attendance at the forum does not mean a return to ESLC meetings." KCTU Chairman Kim Dong-myung did not attend the event but instead held a "National-Level Union Representatives Meeting" to call for the impeachment of President Yoon Suk-yeol.

Instead, Jeong Moon-joo, Director of the KCTU Central Research Institute, who attended the event, said, "In a recent survey conducted by the ESLC targeting 100 employment and labor experts on 'Tasks for Social Dialogue and the Role of the ESLC to Overcome the Era of Complex Crises,' the top priority mentioned was the urgent issue of continuous employment and retirement age extension, and that social dialogue among labor, management, and government is necessary to resolve this."

He added, "I fully agree with this and hope that by April, the political turmoil will clear up. In that sense, I hope this expert survey can be expanded to include direct labor and management parties and key stakeholders, and that public opinion surveys will be actively conducted."

He also said, "Regarding the retirement age issue, it is important to reactivate the continuous employment committee within the ESLC, which had been suspended, but I hope it will be approached through public deliberation. Since public interest is high and there is urgency to resolve this issue, I hope efforts will be made along with political changes by the first half of the year at the latest." He concluded, "In this process, the KCTU will not neglect its responsible role and will strive to achieve results."