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The Struggles of KCTU against Neoliberal Restructuring after Economic Crisis, and Perspectives on Asian Workers Solidarity
By Kim Taeyeon, KCTU, Executive Director of Policy Department, 12 November 2003
I. KCTU’s interpretation of the 1997 economic crisis
1. World capitalist system: ‘Neoliberal globalisation’ under crisis of over-accumulation
1) Globalisation of capital is a global phenomenon that is no longer new. Capital already has no constraints and is free to move actively with the world as its stage. Whatever gets in its way—whether it be national borders, people, mentality—are all targets of reform (attack). On one hand, capital revamps the world in order that it not be constrained by anything and at the same time, is involved in limitless competition among themselves. The reason the competition among capital and that among states is getting more intensive is because of over-production on a worldwide scale. Over-production is making it difficult for capital to profit, and this in turn forms the conditions for further competition among capital and among States. Capital, in order to survive, puts effort into restructuring and technological renovation. Business strategies are also accordingly renovated. However, restructuring, technological renovation and new business strategies always accompany the suffering and sacrifice of workers in all parts of the world.
2) Flexibilisation of the labour market, deregulation, privatisation and opening of markets are becoming an inevitable trend. The attack of capital on labour has become an epochal phenomenon—whether it be developed or developing countries within capitalism. As a result, the gap between rich and poor is getting wider, social welfare is disappearing, and unemployment has become a matter of course. Part-time work such irregular and contingent work is abruptly replacing regular, lifelong work, while the daily rhythm of the workers is no longer set by the rising and setting of the sun, but through the needs of capital.
3) Meanwhile, we are in a situation in which the neoliberal policies of capital and the struggles of workers are confronting one another. Although capital(state) still uses its power to make the workers retreat, the workers themselves are also forming new strengths for struggle despite the unfavourable conditions. The world is, for certain, in a crisis. From the perspective of capital, this crisis is a crisis of over-accumulation, while from the perspective of workers it is a crisis where the livelihood of workers is being deprived. At the same time, the society as a whole cannot eliminate the possibility that production can be destroyed and democracy—even in the state it is in—deteriorated. In most countries of the world, neoliberal policies are exerting great power, however the very fact that neoliberal policies—policies that attack workers—are necessary simply implies that capital is in an imminent crisis. Attacking workers, who are in fact the source of surplus value, has limitations for capital. There is also the possibility that the state will face its limit between conflicting roles of executing neoliberal policies at the same time trying to maintain social integration. Of course, ever since the establishment of capitalism, capital has always reproduced crises, and up until now, it has succeeded in turning crisis into opportunity. Thus, there is always the possibility that it may overcome its present crisis. However, there is nothing to guarantee its success. It is only the strength of the struggle of the workers and our political capacity that will determine whether the present crisis will lead to the crisis of capital(state) or further deterioration of conditions for workers.
2. Asia’s economy
1) The economies of China and East Asia have accomplished high growth despite the longterm depression of the world economy. Thus, it has always been a contentious issue on a worldwide scale whether economic development in East Asia will continue. However, when most countries apart from China fell into the grips of the economic crisis or into depression, it was concluded that the economic growth of this region—once referred to as the ‘East Asian Model— can no longer be an exception in the world economy. In a way, the economic growth in this region was possible because world surplus capital was invested in this region while world economy was in a slump, and also because the industrial structure in the region was still a step behind the intensive competition of the world economy. However, because most countries of the region chose export-oriented economic policies, these countries were abruptly incorporated into the limitless competition of the world economy, and when the region faced over-production, growth came to its limit.
2) Economic crisis of Southeast Asia has a more particular background. The economy of Japan, which is the biggest investor in the region, still had not recovered from the side-effects of the so-called ‘bubble economy’ of the 1980’s. Thus, the Japanese financial sector was burdened with insolvent credit and situation got to the extent in which major financial corporations such as Daiwa Securities bankrupted. It not only became increasingly difficult for Japanese financial corporations to invest in Southeast Asia, but they eventually had to withdraw the invested capital. Also, because the Japanese domestic economy was also in deep depression, it did not have enough capacity to absorb the over-production of Southeast Asia, and Southeast Asian economy quickly slid. As transnational financial capital invested in this area withdrew, countries in Southeast Asia faced the domino of economic crisis, and eventually had to receive relief funds from the IMF.
3. Korea’s economic crisis of 1997
1) The accumulation strategy of the Korean economy began to face its limit ever since 1987. The export-oriented development strategy based on severe control on the workers—low-wage, long-hour labour—on one hand was challenged by the resistance from the workers as manifested in the Great Struggle of 1987, and on the other hand was also being caught up in competitiveness by the latecomers such as China, Thailand, Indonesia and Malaysia. This owed particularly to the fact that the Korean industrial structure consisted mainly of hardware (heavy metal and chemical) industries. Capital had to overcome this situation, and so on one hand, it introduced ‘new business strategies’ with the intention of weakening the workers movement and of heightening productivity. On the other hand, capital began its ‘industrial restructuring’ in order to completely change the structure of domestic industries. It got rid of declining industries that were losing their competitiveness, and tried to find new roads for capital through fostering high-value industries that were more competitive in the world market. The basic formulae for the ‘industrial restructuring’ was maintaining and strengthening the industries that still had a certain amount of competitiveness in the world market such as automobiles, shipbuilding, steel, petrol and chemical, household electric appliances and semi-conductors, while investing the profit that come out of these industries in fostering high-tech industries. To this end, the state attempted to change the former ‘jaebol’ system into a system whereby corporations would concentrate on a particular industry. The latter could not be accomplished without restructuring of the jaebols. However, Korean monopoly capital survived in the competition of the world market and overindulged itself in investment in order to acquire a favourable position amidst the restructuring process. As a result, the Korean economy was faced with over-accumulation (bubble economy). Moreover, investments concentrated in particular industries, so as a whole, there was a large amount of overlapping investment.
2) During the Kim Young-Sam regime, amidst the high demands for jaebol reforms yet unsatisfactory restructuring of jaebols and the financial sector, the government’s call for ‘reform’ and ‘globalisation’ became a nationwide topic. The former manifested itself in his revision of the labour laws (on lay-offs, flexible work-time etc.) that were enforced in order to freeze wages and introduce flexibility in the labour market, backed by the ideology that ‘suffering should be shared’. At this, the KCTU went on general strike from December 1996 to January 1997. However, despite the struggles, the clauses on lay-offs were legislated. The latter manifested itself through the acquisition of membership into the OECD and the opening of the Korean economy to the world market. However, Korea started to lose in price-competitiveness to China and the countries of Southeast Asia, while it was not competitiveness enough to compete with developed capitalist countries. In particular, Korean industries were not based upon original technology, but relied on processing and assembling. Also, core production capacity had to be imported as well as energy and raw material. Thus, it was burdened with the dilemma whereby trade deficit was increasingly getting bigger as the economy grew. It did bear out most of the trade deficit through the high demand in semi-conductors, however, when the prices for semi-conductors fell from over-production, the Korean economy was encumbered with severe trade deficit. Also, excessive investment led to un bearable amount of debt.
3) In 1997, at the end of Kim Young-Sam’s regime, with the bankruptcy of ‘Hanbo Steel’ many jaebols were hit with serial bankruptcy. The legend that jaebols are invincible had started to collapse. Apart from the four major jaebols, it was simply a matter of time as to when another jaebol would fall. It was in this situation that the economic crisis struck Southeast Asia, and with the withdrawal of transnational financial capital that had been invested in Korea, Korea was also hit with the economic crisis.
II. The Strategy of Capital and the State
1. The neoliberal restructuring policies of the Kim Dae-Jung regime
President Kim Dae-Jung, who won the elections in 1997, advocated ‘democratic market reforms’. However, within a short period, it was evident that ‘democratic’ was merely a political rhetoric and that he was, in fact, a strong advocator of ‘market economy’. Not only private corporations, but public companies—apart from those that were related to ‘national security’—also became targets for sell-offs. Neoliberal globalisation policies that have as their core policies for complete ‘opening’, as their premise corporate restructuring with lay-offs and wage decrease, and privatising public companies were the strategies of this government.
2. Deceptive tripartite social consensus policies
On the other hand, the Kim Dae-Jung regime focused on minimising workers’ resistance through social consensus in the Tripartite Commission. The Kim Dae-Jung government had its reasons as to why it was desperate to incorporate the democratic workers movement, in particular, the movement led by the KCTU. In Korean reality, where there exists basically no social welfare system that can absorb mass unemployment, unemployment had the potential to cause social and political discontent. It could even shake the foundations of the regime. Should the KCTU take on the issue of unemployment and struggle, this potential can become a reality. Thus, the attempts of the Kim Dae-Jung government to incorporate the KCTU into the Tripartite Commission were to implement lay-offs—deeply related to the issue of attracting foreign investments—and also to prevent forehand solidarity between the KCTU and the unemployed.
3. The ideology advocating that ‘suffering should be shared’
The Kim Dae-Jung regime strengthened its ‘suffering should be shared’ ideology, through which it advocated in face of State bankruptcy, workers should accept lay-offs and jaebols implement restructuring. However, whatever may be the content of the jaebol restructuring, the reforms that the government was demanding had nothing to do with sharing the difficulties. The jaebols were resisting to the restructuring demands of the government as a form of signalling to the government to reconsolidate government intention to strengthen control over workers, and as a way of saying that they will themselves do what they need to do without the interference of the government. The jaebols were also telling the government that they will not accept any attempts to challenge their social and political position. At this, the Kim Dae-Jung regime continued to put pressure in order to maintain its superiority in its relationship with the jaebols.
III. The Struggles of KCTU
1. Confusion in the first stages: Provisional agreement to lay-offs at the Tripartite Commission, February 1998
In December 1997, just after the economic crisis, the newly elected president, Kim Dae-Jung, proposed the formation of the Tripartite Commission and asked for the participation of KCTU. After a debate inside the KCTU, it decided to participate in January 1998, and on 6th February, came to a provisional agreement on the so-called tripartite social contract. The contract contained jaebol reforms, some reforms to the three basic labour rights, strengthening of social welfare though in abstract terms etc., however, the main objective of the contract was restructuring and obtaining flexibility of the labour market including expansion and immediate implementation of lay-offs, and introduction of worker dispatch system, in order to implement its neoliberal restructuring policies. However, on 9th February, at the KCTU National Congress, the provisional tripartite social contract was rejected, and the KCTU faced a crisis in which the entire leadership resigned.
2. Struggles of 1998: Reinforcement and counterattack of the workers
1) Mayday struggles of 1998 and the May general strike
KCTU, after having reorganised itself three months after the resignation of the leadership decided its demands to the government as thus, and started its counterattack.
On 1st May 1998 at the Mayday struggle, 35,000 workers mobilised and the workers declared their counterattack at the neoliberal restructuring and lay-off policies of the Kim Dae-Jung regime through a fierce struggle on the streets. The Kim Dae-Jung regime responded to this struggle by issuing arrest warrants of the KCTU leaders. The KCTU did not give in, and for two days on 27th and 28th May, 230,000 workers from 130 unions affiliated to six federations implemented a general strike with demonstrations in 15 regions. Asian workers such as the Philippines KMU, KPP, Pakistani women workers, Bangladesh Democratic Workers Party, Confederation of Nepalese Trade Unions, Vietnam General Confederation of Labour sent protest letters to the Korean government and messages of solidarity to the KCTU.
2) Participation in the Tripartite Commission, and secession
From 31st May, negotiations between the government and the workers began. The KCTU re-entered the Tripartite Commission to negotiate on methods to prevent abuse of lay-off and dispatch policies, on reduction of working hours to 40 hours from 2000, on ways to stop unjust acts of employers and on punishment of employers. It can be assessed that whereas the participation at the Tripartite Commission in 1997 weighed on social consensus, the one in 1999 weighed on tactical utilisation of the Commission. However, the Tripartite Commission had already accomplished its original objectives such as the introduction to lay-off and dispatch policies and did not need to deal with the demands of the workers. It became titular, while exploitation and repression on the workers increased. Eventually a few months later, the KCTU announced that it was withdrawing from the Commission.
3) Struggles at ground level
With restructuring implemented at many companies, lay-offs and decrease in wages were enforced upon the workers, and workers fought at ground level.
In the financial sector, which faced the first restructuring attack, five banks were dissolved. In this process, the 5,000 financial workers who lost their jobs struggled against restructuring. Also, the union at the largest private company, Hyundai Motors, fought against lay-offs. Mando Machineries union went on strike as the company faced bankruptcy from making guarantees to company subsidiaries and the burden passed onto the workers. The Kim Dae-Jung regime sent in police forces and violently suppressed the workers.
3. Struggles of 1999-2001
1)Struggles of Seoul Metropolitan Subway union and others against restructuring, 1999
The demand for stop to lay-offs and restructuring, and the call for reduction of working hours succeeded in mobilising forces for struggle, socially highlighting the issue, and forming public opinion against lay-offs and for reduction of working hours (according to a survey, 75-80% supported the demand of the workers). However, on the issue of ‘stop to restructuring’, the Kim Dae-Jung regime perverted this demand to appear as anti-reformative. To counteract against this offensive, the KCTU used the terminology ‘democratic restructuring’ and held press conferences. However, the differences between ‘democratic restructuring’ and the ‘reforms’ or neoliberal restructuring of the Kim Dae-Jung government were not emphasized enough, and many people mistakenly thought that the KCTU had agreed to restructuring, causing much confusion and misunderstanding within the organisation.
In this situation, the KCTU decided on its direction of struggle to be ‘targeting the government and changing the neoliberal policies of the Kim Dae-Jung government’, and fought throughout April and May. There was a all-out struggle for a week centered around the strikes of the Seoul Metropolitan Subway union against restructuring that started on 19th April. From 12th May, the Metal Workers Federation, Health Workers Union, Clerical & Financial Labor Unions, University Workers Union and the Taxi Workers Union started in series, a struggle against restructuring and lay-offs in connection with their struggles during collective bargaining. However, because these struggles were not centered around the issues directly targeting the neoliberal policies of the government but were rather centered around individual issues simply concentrated during one particular period, there was a limit to how much force the struggles could exert.
2) Repression of 2000 and the struggles of the Lotte Hotel workers
In June 2000, the Kim Dae-Jung government sent in police forces to break up the strike of the Lotte Hotel union, which led to a continuous struggle led by the KCTU for two months.
3) Struggle against lay-offs at the Daewoo Motors, 2001
During the process of GM’s acquisition of Daewoo Motors, 1,700 workers were laid off. The Daewoo Motors union began a strike against the lay-offs, and the KCTU identified this struggle as not being a struggle of an individual company, but that of the entire KCTU, directly targeting the government. In the Incheon area, the angered workers implemented daily struggles with molotov cocktails.
4. Struggles against privatisation of public corporations, 2002-3
1) Power plant, gas and railway solidarity strike action and KCTU’s solidarity general strike
The final objective of Kim Dae-Jung’s restructuring policies was the privatisation of public corporations. The direct result of this policy was sell-offs to foreign capital. When the government tried to privatise power plants, gas and the railway, three unions—the power plant union, gas union and the railway union—started on 25th February, an historical solidarity strike action. The KCTU implemented a solidarity general strike on 26th February.
2) The ‘disperse tactic’ strike action of the power plant union
In particular, the 5,000 members of the power plant union went on ‘disperse’ strike action for 40 days. With violent suppression using State power disabling them to gather in one place, the members spread around the whole country in groups of 4-5 persons. Behind this tactic were KCTU members, who organised many support and solidarity groups to provide food and accommodation, and implement education and propagation. Unfortunately, the KCTU’s solidarity general strike failed to take place on 2nd April and the struggle came to an end without much success, however, the sell-off of the power plants was delayed and forced the Noh Moo-Hyun government to promise, as his election campaign, to maintain the public sector.
3) Strike action of the railway workers, 2003
On 20th April 2003, the railway workers union started a strike in demand for the Noh Moo-Hyun government to keep its promise to maintain the public sector, and succeeded in consolidating an agreement between the government and the workers. However, soon afterwards the government broke the agreement and passed in the National Assembly a legislation to restructure the railway industry. On 28th June, the railway union started a strike action, and the government suppressed the action by sending in riot police, arresting union leaders, mass lay-offs, and issuing a seizure worth 9.5 trillion won against the workers. Although the strike action of the railway workers union against privatisation failed at the time, the legislation on privatisation of the railway industry remains to be debated and the struggle between the workers and the government is not over yet.
5. Struggle for basic rights of women, small-to-medium, irregular and migrant workers
1) The conditions of women, small-to-medium, irregular and migrant workers
The incorporation of unstable workers and the expulsion from the market those who had given up job-seeking enabled the unemployment rate to be controlled at 3%. However, the labour market was already reorganised in a way in which irregular workers now compose 56% of the workforce. Compared to 1997, in 2001 the wage of full-time workers in workplaces of more than 10 persons rose 8.1%, while during the same period, the real wage of workers working in workplaces of less than 10 persons decreased by 8.4%. The wage of irregular workers is merely 50% of regular workers. This situation is expected to worsen should the labour market flexibilisation policies of the capital and regime continue.
Out of women workers, 70% are irregular workers. However, the irregularisation of women workers, who are increasingly entering the labour market, is expected to expand. In particular, women workers are increasingly entering the services industry and thus a majority of newly entered women workers are mostly irregular workers.
It is also expected that more and more migrant workers, who are estimated to number about 400,000, will enter the labour market, and a majority of migrant workers are also irregular workers. Capital discriminates between the basic rights of migrant workers and those of Korean workers, and maintains inhumane working conditions including low wages, long working hours, industrial accidents and violation of human rights.
2) Struggles of irregular workers
3) The perspective of KCTU
While the labour market is being reorganised to expand irregular workers, trade union organisations have not overcome their membership based on regular workers in large corporations. As a result, the majority of irregular workers are isolated from organised movement, and the demands and the struggles of unions do not accommodate the problems of the working class as a whole. In the meantime, capital’s attack through irregularisation of labour and expansion of discrimination are being carried out, resulting in increased gap between the workers.
Now, the tendency of irregular workers to view the demands and struggles of the KCTU as being distant from their problems is growing. What the KCTU should really fear in terms of isolation, is the possibility that workers in small-to-medium workplaces may turn away from the KCTU. In this perspective, the representation of the 13 million workers of the KCTU attained after the Great Struggle of 1987 is being challenged. Without change, there will not be a way out from the criticism that the trade union movement is ‘collective selfishness’. Therefore, if the KCTU does not transform itself to center around these small-to-medium workers—who comprise a majority of the 13 million workers—then there can be no future for the Korean workers movement.
4) Strategies of KCTU
At the 2003 National Congress, the organisation of irregular workers and the struggle for basic rights were decided to be the most important organisational tasks for the next five years. To this end, KCTU has decided as its five major areas of organisation to be subcontracted workers, service workers, specially-employed workers, irregular workers of local governments and one-day construction workers. The KCTU has been carrying out its first step.
Empowered by these plans, subcontracted workers unions were established in companies such as Hyundai Motors, and in the process solidarity with the regular workers has grown. The specially-employed workers (truck drivers) have implemented two major strikes, and there is a research being made on methods to organise irregular workers in the services sector.
Also, the KCTU decided to struggle for legislation of working permits to protect the rights of 400,000 migrant workers, however, employment permits were legislated to co-exist with the industrial trainee system —a system that is a chain of exploitation for migrant workers.
IV. The results of neoliberal globalisationxo
The five years, starting with the economic crisis of 1998, during which the Kim Dae-Jung was in power, was a period of suffering for workers at the lower end—contrary to the expectations of some. The neoliberal labour policies that the government enforced in the name of recovery from the economic crisis have brought about severe job insecurity and deterioration in lives of workers, to a level never experienced.
1. The IMF Structural Adjustment Program: Deepening of economic dependency and instability, strengthening of monopoly
The Kim Dae-Jung government, throughout its term of office, was committed to implementing the IMF’s Structural Adjustment Program(SAP) that functions only in the interest of transnational financial capital. The IMF, through its relief fund, enforced macro stabilization policies, restructuring policies and the liberalisation of the capital market with austerity measures and high interest rates. The Kim Dae-Jung government, under the slogan ‘parallel development of democracy and market economy’ implemented corporate restructuring, financial restructuring, labour restructuring, public sector restructuring and opening of markets. As a result, on the exterior it seems that Korea had overcome the economic crisis and recovered previous level of growth, however, as a result of faithfully accommodating the interests of transnational financial capital, the economy has been polarised and dependency on foreign capital deepened, causing increased subjugation and instability of the economy.
First of all, from the abrupt opening of the capital market, the value of listed stocks owned by foreigners as of December 2001 was worth 94 trillion won, composing 36.6% of the total stock value. In fact, the Korean stock market is being moved by the hands of foreign investors. Also, out of the investment, 88 trillion won is concentrated in short-term investment. It is evident that the Korean economy can very well face another economic crisis should the short-term investment abruptly flow out of Korea.
The dependency of major Korean industries is also worsening. By November 2002, the proportion of foreign ownership of major banks was 67.5% for Kookmin Bank, 65.6% for KorAm Bank, 51% for Korea First Bank, 46.8% for Shinhan Bank, 45.1% for Hana Bank and 34.4% for Korea Exchange Bank— foreigners comprise more than half of bank ownership or are the largest investors. Also, the ownership of major domestic high-profit corporations is also all in the hands of foreigners—80.5% for SK Telecom, 60.8% for Pohang Steel, 54.4% for Samsung Electronics, 52.2% for Samsung Fire Insurance and 48.6% for Hyundai Motors.
The liberalisation of foreign exchange has, in the short term, improved the foreign exchange holdings by stimulating the influx of security investment funds of foreigners. However, at the same time, it has worsened the instability of capital and foreign exchange markets, increasing the possibility of another economic crisis. The amount of foreign exchange flow has increased abruptly (3.3 times) from the 24.3 million dollars recorded in 1997 to 80.3 million dollars in 2001. The Korean economy is now in a situation in which should some element trigger the outflow of foreign capital, there will be a repetitional foreign exchange crisis.
After the economic crisis, domestic industries have become concentrated in such areas as semi-conductors and automobiles. In 2000, the market share of 10 major export products recorded 46.7% of total exports. The concentration of industrial structure to particular products makes it difficult for the economy to respond to external economic changes, deepening economic instability.
Moreover, although the government promised reforms to the jaebol structure, which caused the economic crisis, it did not implement any changes to the core of the problem—ownership structure of the jaebols. It merely reorganised the relationship between the jaebols, and the minimal reformative measures such as the limit on amount of investment regressed and acted as a justification for increased monopoly of the jaebols. As a result, the concentration of economic power of the jaebols increased, and out of the 30 conglomerates, the proportion of the assets of top three conglomerates out of the total increased from 32.4% in April 1997, to 38.6% in April 2000. During the same period, the increase rate of assets of these conglomerates record 49.8%.
Monopoly from the expansion and establishment of subsidiaries within the financial industry is also getting more serious. After the economic crisis, the government promoted policies to restructure financial institutions, focusing on mergers, expulsion, downsizing etc., and by June 2002, about 630 financial institutions (30.5% of total) had been expelled from the market. Also, through the establishment of financial holding companies and large-scale mergers, the 33 banks that existed in 1997 were cut down to 17. As a result, at the end of 2001, the proportion of total value of credit/deposit of top five banks was over 70% of the total, and if Choheung Bank and Shinhan Bank are merged, then the proportion is expected to record over 90%. In the beginning of 1997, household debt was 182 trillion won, but by June 2002, it ½º risen to 397.5 trillion won—increase of more than two times during five years. Debt per household records 27.2 million won, which is equivalent to 86.3% of yearly household income of an urban worker, and to 70.6% of GDP. Proportion of household loan from financial institutions was 40% at the end of 1999 and 52% at the end of 2001. This is more than half of total loans. As household debt increases, individual debt defaulters also increase. The increase rate and size of household debt is so high that should the price of assets fall, then it could well lead to bankruptcies of households and financial institutions.
2. Polarisation of society and widening of gap between rich and poor
After the economic crisis, polarisation of society and widening of the gap between rich and poor have worsened. Wages and income of poor people including workers have decreased, and promises for improvements in social welfare ended up being rhetorics. On the other hand, executives of large corporations and the rich became even wealthier. In particular, with the proliferation of irregular workers, who now compose more than half of total working class, job insecurity of workers at the lower-end has become more severe. Serious discrimination in wages and working conditions, neglection from social welfare, infringement of basic labour rights all threaten the livelihood of irregular workers and those in small-to-medium workplaces. The livelihood and basic labour rights of vulnerable workers such as migrant workers and disabled workers are still not being guaranteed.
After the economic crisis, the income gap between social classes has increased. Gini’s coefficient, which representatively shows the level of social inequality, increased from 0.283 in 1997 to 0.319 in 2001. The income gap between the top 20% and the lowest 20% increased from 4.49 times in 1997 before the crisis, to 5.36 times in 2001. It is evident that the wealth gap had increased during the economic crisis and the restructuring process. While the average monthly income of the lower 20% is 990,000 won, that of the top 20% amounts to 5,290,000 won.
It has also been found that the debt burden for the low income class has increased during after the IMF period. If we look at the savings rate of the lower strata of urban working households (the lower 30%), in 1997 it was 9.1%, however, after 1999, it has recorded a minus, falling to—3.4% in the beginning of this year. On the other hand, the savings rate for the upper 30% has been stable throughout the same period and is enjoying a high savings rate (reserve funds) of 36%. As a result, the difference in the savings rate for upper and lower classes has recorded its highest in the beginning of this year and the rate for former recorded 39.5%.
In the meantime, owners of corporations have been accumulating much wealth. The average yearly income of executives of major corporations is over billions without taking into account income from their assets such as stock options—with 3.6 billion won for Samsung Electronics. Compared to the yearly average wage of the entire workers of 20 million won, and that of irregular workers at mere 10 million won, it is evident that the wage/income gap between workers and owners is enormous.
The gap between the upper and lower classes is also serious in housing. In 2001, although the total housing rate was 98.3%, property ownership was concentrated to a few. In 2000, the total proportion of households living in rent was 42.5%, with rent getting higher and higher. While the bank interest rate is around 5%, the increase rate of rent records an average of 16.1%. Even if wages are slightly increased, workers have to get loans in order to pay their rent. In fact, within the lower 30%, the proportion of rent fee in total income amounted to 35.7% in August 2001, compared to 21.2% in November 2000.
Furthermore, poverty is inherited. If we look at the distribution of first year students at the Seoul National University, the proportion of students with fathers working in management and professional areas was 53%, which is four times as much of those with fathers working in production and farming/fisheries. This gap is wider that it use to be. Students with fathers in management—manager or higher positions, or in high-ranking government positions—was 28%, those with fathers in professional jobs—doctors, university professors, lawyers—was 24.8%. The society is changing into a society where without money, one has to miss out on education opportunities.
Expenditure in private education is higher in Korea than anywhere else in the world. in 1998, private education expenditure was 2.96% of the GDP. Compared to the 1.11% average of OECD countries, it is 2.7 times higher. This implies that public education is weak. Children from wealthy families are able to afford high-quality education, whereas those from poorer families are blocked from the start.
Taxation policies, which should play the role of income redistribution by taxing the wealthy more, are going in the opposite direction. Special consumption tax has the effect of redistribution by taxing the wealthy who buy luxury products with prices that are over the prices of general consumer products. However, in 1999, indirect tax for expensive home appliances, pianos, golf course fees were lowered, and then in 2000, indirect tax for golf goods, gems, various high-priced natural food supplements and other luxury products and entertainment was also lowered. This year, the government even extended the measures that lower special consumption tax on automobiles. On the other hand, the government actually increased indirect tax for the general public.
In 2001, the government lowered taxes by 10%, from 10, 20, 30 and 40% (respectively according to social class) to 9, 18, 27, 36%. Thus, the upper strata benefitted from maximum of 4% tax cuts. At the end of 2001, corporate tax was cut. Although corporate tax is imposed only on those that have a profit, under the excuse that tax cuts will heighten corporate competitiveness, corporate tax—already lower than other countries—was lowered 1%. This amounted to a total of 750 billion won tax cuts. Thus, in 2001, through cuts in income tax and corporate tax, those with wealth benefitted a total amount of 2 trillion won. This burden is then imposed upon general citizens.
In addition, there is no stock transfer income tax. Although foreign financial capital and domestic venture capital all fought a battle to make speculative profit from the stock market, stock transfer income tax is imposed only on large stockholders with more than 3% ownership and with more than 10 billion won worth of stocks. Therefore, most stockholders profit from stock transfers without paying any tax. In 1999, when stock prices briefly climbed, the total profit from stock transfer amounted to 200 trillion won. This is more than half of yearly GDP, and is in fact ‘speculative income’ that flowed into the pockets of capital.
3. Surge in irregular labour, insufficient social safety net
Employment policies of the government centered around lowering the unemployment rate that rapidly increased after the economic crisis did lower the unemployment rate, however, the quality of employment has been greatly deteriorated with neoliberal flexibilisation policies that increased the number of irregular workers. Whereas the rate of irregular workers was around 40% before the economic crisis, by August 2001 it had increased to 56% of total wage workers.
Some institutional reforms have been made, for example, expansion of employment insurance, introduction of the Basic Livelihood Protection Program and other programs for the unemployed and the poor, however, the unemployed who are new in the labour market, the involuntary unemployed who compose close to 70% of total and irregular workers are excluded from the benefits of employment insurance. Also, the allowance period for unemployed benefit is short and the benefit itself low. Also when the allowance period is over, there is no support. Furthermore, the actual benefit from the Basic Livelihood Protection Program is low and much of the poor are in fact excluded from this program due to unrealistic application.
4. Exclusion for disabled and migrant workers from basic labour rights
The neoliberal labour market flexibilisation policies are greatly deteriorating the lives of vulnerable workers such as migrant and disabled workers. These workers, who are at the lower rung in the labour market, are suffering from lack of employment opportunities and terrible working conditions.
Most migrant workers, who amount to over 400,000, are working as industrial trainees and thus suffer from severe infringement of human rights and are completely excluded from the benefits of the three basic labour rights. Non-registered illegal migrant workers, who are about 80% of total migrant workers, have to work in even worse conditions because of the fact that they are illegal. Industrial injuries have also increased, endangering their lives. However, the Kim Dae-Jung government has refused to issue work-permits that will give them their labour rights, while expanding the industrial trainee system. The government also repeated its intentions to forcefully deport illegal workers, pushing the workers into despair.
The unemployment rate for the 1.2 million disabled people records 28.4%. Over 40% of employed disabled are those that are self-employed, and as can be seen from the high proportion of one-day jobs, jobs for the disabled are very few and those that exist are unstable with extremely low wages. Although the law stipulates 2% disabled employment for all workplaces, the actual rate for central and local governments is 1.61%, while that of private and public corporations is a mere 1.10%. Also, their mobility rights are not guaranteed, severly limiting their basic rights and economic activities.
5. Decrease in real wages of workers
Workers suffer not only from job insecurity, but also from their daily life because of cuts in real wages. In particular, the wages of irregular workers have greatly decreased and thus their livelihoods threatened. The nominal wage per person for the entire 13 million workers increased 13.2% during five years, from 1,350,000 won in 1997 to 1,530,000 won in 2001, however, if we reflect inflation, real wages actually decreased. If we put the real wage at 100 in 1997, it was 98.1 in 2001, a decrease of 1.9%. Compared to the fact that production during the same period increased 45.4%, the relative wage of workers greatly decreased.
The government, at the moment, is promoting a corporate pension scheme to replace the present retire benefit scheme. The purpose of the corporate pension scheme is to pour into the stock market funds that should guarantee the income of workers after they retire. If this scheme is introduced, the income of retired workers will face unstable destiny. Also, this scheme will exclude most irregular and small-to-medium workers from company-based welfare, thus widening the income gap between regular and irregular workers.
6. Discrimination in wages, working conditions, social welfare for irregular workers
Not only are irregular workers seriously threatened in job security, they are also severely discriminated in wages, working conditions and social welfare. According to a report on economic activity made by the Statistics Office (August 2001), the average monthly wage of irregular workers was 890,000 won, which is half (52.6%) of regular workers whose wage is 1,690,000 won. Within irregular work, provisional part-time workers receive the most less at 470,000 won (27.6% of regular workers), homebased workers 500,000 won (29.4%), on-call workers 690,000 won 4(40.8%) and leased workers 790,000 won (49.3%). In particular, the wage of irregular women workers is very low. The average of irregular women workers is 720,000 won, which is only 38.9% of regular male workers. In the case of women home-based workers, the wage is 370,000 won, 20.1% of regular male workers.
Irregular workers are discriminated not only in direct wages, but also in treatment such as retirement benefits and bonuses, and in social insurances such as pension and health insurance. In the case of retirement benefits, while 94.3% of regular workers receive the benefit, only 13.6% of irregular workers benefit. Also, only 14.0% receive bonuses and only 9.7% receive over-time pay. As for social insurance, 19.3% are registered for pensions, 22.2% for health insurance, and 20.7% for employment insurance. The base of social insurance has become unstable.
7. Continuation of long working hours
There has been no improvements to the long working hours. Just after the economic crisis in 1998, working hours decreased somewhat due to economic depression, however, the working hours increased again, from 46.7 hours in 1997 for all sectors to 47.0 hours in 2001. Working hours in the manufacturing sector increased from 47.8 hours to 48.3 hours during the same period.
Thus, internationally, working hours in Korea still records one of the highest. According to the OECD Employment Outlook, working hours in Korea was 2,623 hours in 2001— of course, the highest among OECD countries. Compared to former Soviet countries such as Czech Republic or Slovakia that recorded around 2,000 hours, Korea was 600 hours higher, and compared to European countries, almost 1,000 hours.
The former government had promised to reduce working hours by adopting the five-day working week, so as to get out of the disgrace of being ’the country with longest working hours’ and also to improve the lives of workers. However, there was no real reduction of working hours by the end of its term in office. The proposal for the reduction of working hours that was passed in the National Assembly in August 2003 includes worsening of working conditions and also measures that are distant from actual reduction of working hours such as `$ delay until 2011 the reduction of working hours for workers in small workplaces, who compose 60% of workers a) reduction in paid day-offs and holidays, and b) provisional heightening of the top limit on over-time work.
8. Deterioration in lives of women workers: Partial improvement in equal employment, sexual harrassment, maternity protection, but lack of practice
The lives of women workers have also deteriorated. Although women’s economic participation has risen, 70% of women workers are irregular workers, suffering from job insecurity and low wages. During the restructuring process, women workers were the first targets. However, they did not receive any protection. There were some improvements in the Equal Employment Act—child-birth leave was extended and wages given during maternity leave-, however, there has not been enough effort made into actually putting them into effect. Also, the regulation to prevent work on weekends and during the night was lifted and menstrual leave changed to a non-paid leave— deteriorating the working conditions of women workers in general.
The wage difference between genders has gradually decreased during the past years, however, by 2001, the total wage of women workers was only 65% of men. In particular, the average monthly wage of irregular women workers was 665,000 won, which is 75% of irregular male workers, and is a mere 42.4% of the average wage of all regular workers.
During the restructuring process, women workers are targeted to be the first to go. In the first half of 1998, according to a government inspection report on the list of people who had been forcefully retired from nine major banks, 74.5% were women workers, in some cases 95.5%. Many of them were rehired as temporary workers. After the economic crisis, restructuring concentrated on downsizing, resulting in lay-offs of women, and abolishment of departments and workplaces where majority were women.
In August 2001, during the revision of women-related clauses in the Labour Law, the clause that prohibited extended/night/weekend work of women workers was lifted. This is a measure that will inevitably worsen the working conditions of women workers who already suffer from low wage, long working-hours and lack of maternity protection. The reality was that the so-called protection against extended/night/weekend work never even was implemented properly. Also, the government is promoting, along with the introduction of the 5-day workweek, and change of menstrual leave to a non-paid leave.
On the other hand, with the revision of the Equal Employment Act, the concept of indirect discrimination was introduced and discrimination during employment or working conditions also became legally recognized. However, it is being raised that more detailed criteria must be established for the law to be effective.
In February 1999 and then in August 2001, the Equal Employment Act was revised twice to strengthen institutional protection against sexual harrassment in workplaces. However, with the Ministry of Labor, the Ministry of Gender Equality and other legal investigation institutions still focusing on firm evidence, there is still a long way to go for the revisions to be fully effective.
Since November 2001, child-birth leave was extended to 90 days, with the wage for the last 30 days provided from employment insurance. However, from January to September 2002, workers who actually applied for child-birth leave recorded 13% (15,964 persons) of what was expected by the Ministry of Labor, showing once again low implementation. One reason for this is because majority of women workers are provisional or contract workers who are pressured to leave even before they have the chance to use their leave, and in many cases, their contracts are breached or are laid-off.
The socialisation of maternity protection expenditure is also insufficient. In 2002, out of the budget of 123 billion won that was allocated to the wage support of workers who were on child-birth leave, only 15 billion won was actually allocated, and 78% of the support had to come from the employment insurance that is funded by both the company and the workers. In the 2003 budget, even that much was further decreased and is not able to fulfill the objective of obtaining socialisation of maternity protection.
As from November 2001, workers who use child-care leave are able to receive support of 200,000 won from the employment insurance, and the amount has increased 50% to 300,000 won. Also, provisions to expand support for child-care leave and women re-employment programs and increase the amount are being executed to all workplaces that employ more than one persons . However, with the wage support still too low and with lack of provisions to redistribute work when a worker takes leave, the proportion of workers who actually are able to use this provision remains still low, at 12.6%.
9. The increase of industrial accidents including bone and muscle diseases
Restructuring has also increased work intensity, and with the lifting of regulations on industrial safety, there has been a sharp increase in industrial accidents, including bone and muscle diseases, and cerebral and heart diseases. The health rights of workers is being seriously challenged. The IMF process that started at the end of 1997 has been the direct factor in threatening the health of workers. With neoliberal restructuring being realised in the from of mass lay-offs and flexibilization policies, workers are facing severe work intensity and control.
The increased work intensity inevitably leads to increase in industrial accidents and diseases. Compared to 1999, the number of deaths from industrial accidents increased 457 persons, and in particular the number of bone and muscle disease patients increased 470%. Also, the number of patients with cerebral and heart related diseases, which directly lead to death from overexertion has increased 180% since 1999, recording 2,192 persons.
Labour policies after 1998 have led to suicides by workers suffering from industrial accidents. The suicides of Park Kwang-Jae and Lee Sang-Kwan symbolically manifest the fact that the logic of capital and the government is fundamentally anti-labour, anti-human rights and violent, driving workers to death. Since 1998, the number of workers committing suicide while undergoing medical treatment has increased sharply.
10. Weak social welfare
The social welfare expenditure of the government is far from enough. The Kim Dae-Jung government, after taking office, has promised to strengthen social welfare. It is true that social welfare in Korea has somewhat improved over the years. The welfare expenditure has increased, pensions expanded to cover urban areas in 1999, and the Basic Livelihood Protection Program introduced in 2000. As of 1999, social welfare expenditure against GDP was 9.77%, which is a big increase from 6.64% in 1997. However, compared to other OECD countries, it is still low. Compared to North European countries such as Sweden, Korean expenditure is one-third, and the average for all OECD countries excluding Korea is over 21%—twice of Korea. It can be said that during the last five years, social welfare expenditure has indeed increased, however, compared to international standards it is still extremely low.
The reason why social welfare expenditure of the central government is low, is primarily because most of the government budget is used unproductively and in areas that are not in the interests of the people, namely the military. Korea has one of the most highest proportions of military expenditure, higher even than the Cold War protagonists and great military powers—the US and Russia. Korea’s military expenditure is incomparable to majority of countries who are at 3 to 7% level.
The military budget for 2003 was 15.6% of total budget, recording 17.4 trillion won, which is a 6.4% increase from last year. Even from the present level of military budget, a 50% cut will allow 8.7 trillion won gain, and this amount is 81% of this year’s social welfare budget of 10.7 trillion won. Military budget must be cut and used for social security.
The health insurance fund is in a difficult situation from high medical fees and medicine prices. Even though citizens pay their insurance fees, the fund can only be in difficulty because of high medical fees and medicine prices. In a word, no matter how much money goes in, more goes out. The main reason for last year’s health insurance deficit was because of the high increase in medical fees. During 13 months from November 1999 to January 2001, doctors raised their fees 44%. In the meantime, the insurance fee that citizens had to pay increased 21.4% in 2001, 6.7% in 2002 and 8.5% in 2003. Because the increase in average wage is automatically reflected in the rate, the total increase in 2001 amounted to 27.0%, and in 2002 and 2003, 16%.
11. Continuous repression against workers, lack of security in basic labour rights
Even during the so-called ‘Citizens’ Government’—the catchphrase of Kim Dae-Jung government—there was no improvement in industrial relations and basic labour rights. Instead, policies of exclusion prevailed in their many forms. The government attempted its mainstreaming strategy through the Tripartite Commission, however, while pro-capital policies such as lay-offs were immediately legislated, the demands of the workers such as reduction of working hours and guarantee of labour rights of government employees have either been ignored or distorted. Although somewhat different with the violent repression of past regimes, neoliberal policies based on exclusion are strengthening the attack on basic rights of workers. Resistance of workers during the restructuring, change in employment and privatisation is still being severely repressed. In particular, towards the end of its term of office, the government had pushed for anti-labour, pro-capital policies such as the legislation of bill on establishment of Free Economic Zones. On the other hand, demands of workers such as three basic labour rights of government employees and abolishment of arbitration are still not realised.
If we look at the number of arrested workers in comparison with that of Kim Young-Sam’s regime, during the former government, 632 workers were arrested—average of 2.43 workers per week. However, during the Kim Dae-Jung government, 878 workers, which is 3.43 workers per week, were arrested— an increase of more than 40%. In the past, the reasons for arrests were for breaking the law that forbid third party involvement and the law on demonstrations, however, during the Kim Dae-Jung government, the main reasons were obstruction and violence under criminal law.
Apart from imposition of criminal law for obstruction and violence, there has also been imposition of civil law unrelated to labour laws, such as suing for compensation and issuing seizure and confiscation of property. These methods have become new ways of repressing workers. In particular, suing for compensation and claiming seizure of wages and property not only target workers but also their families and relatives. Through material, psychological and mental strains on workers, these methods end up destroying family and personal relationships.
Court sentences on labour-related cases have also become more conservative and pro-business. Those related to neoliberal policies are sentenced strictly in the interests of capital. While the courts protect management rights and personnel rights of owners, they do not recognize employment transfers during change of ownership (eg. Sam-mi Steel) nor ban arbitrary switching of dispatched workers (eg. drivers of broadcasting corporations), nor ban illegally dispatched workers (eg. Insite Korea). Even in cases of collective industrial relations— for example, Daewoo Motors—strike action against lay-offs were considered illegal. Or, after the strikes at Hyosung, Jang-eun Securities, Signetics, power plants and construction sites, the courts allowed a broad range of civil law to be imposed onto the workers, showing the pro-business tendency of the courts.
After Kim Dae-Jung came into power, there have been some improvements in terms of union rights, with the legalization of the KCTU and the teacher’s union, however, in general, the application of three basic labour rights have regressed.
The government has proposed a bill on government employees that include the refusal to recognize them as workers, no collective bargaining and the ban on solidarity action of government employees. It is not fulfilling the agreements made during the first term of the Tripartite Commission on union rights of government workers and unemployed workers. Also, the government is blocking the formation of unions for university professors, specially-employed workers and migrant workers.
The government has incapacitated collective bargaining rights in the public sector using the budget as its weapon, and in the case of companies that have become bankrupted and under trusteeship after the economic crisis, the courts invalidated previous collective agreements and refused to recognise the previous agreements or possibility of re-negotation. Although there have been high demands for industry-based collective bargaining, there have been no institutional measures. Issues related to management are excluded from collective bargaining and there have been various legal methods to make collective bargaining more difficult.
In the case of public utilities, because of the clause on arbitration, collective action of workers is in fact banned or limited, and the principle of ‘no work no pay’ has also functioned as a way of limiting collective action. There has been no punishment for companies that did not implement the collective agreement, or if punished, companies got away with meagre fines. The collective actions of unions to push for implementation of agreements have also been brandished illegal.
V. The Roh Moo-Hyun regime and KCTU’s tasks for struggle
1. Roh Moo-Hyun regime’s failure at reform
1) The breach of agreement between workers and government; anti-labour policies of Noh Moo-Hyun regime
The Roh Moo-Hyun government, in the beginning of its term in office, seemed to focus on negotiation and dialogue, avoiding repressive policies against workers. The government promised, in face of the death of Bae Dal-Ho of Doosan Heavy Industries, to get rid of the inhumane repression on workers such as seizure and mass arrests and to make reforms. During this period, when the demand for reforms were manifesting itself in form of struggles of the workers, the government and the workers came to agreements to stop NEIS, protect public railway (April) and on the issue of truck drivers (May).
However, capital and conservative media brandished the labour policies of Roh Moo-Hyun as pro-labour policies, and stated that the economic depression that started when Roh Moo-Hyun took office was because of these ‘pro-labour’ policies. At this criticism, the government broke all the agreements it made with the workers, and within four months of taking office, started to show its anti-labour nature. The strike on 28th June of the railway union—in protest against the breach of the agreement—was severely repressed by riot police, with mass arrests and penalties, and sentencing of 9.7 billion won in compensation. At the strike of truck drivers on 21st August, the government concentrated only on repression. During the seven months of Noh Moo-Hyun government, the number of arrested workers amounted to 120.
2) A ‘pro-capital regime’ that accommodates all demands of capital
The cabinet meeting held at the end of June decided to pass the enforcement ordinance of the Free Economic Zone Act to be effectuated from 1st July, including the clauses that eliminate monthly leave, paid menstrual and weekly leave, and those that expand dispatchment of workers. When the government took office, it promised to eliminate the five major discriminations—against gender, education, irregular, disabled and migrant workers—and it also promised to get rid of the industrial trainee system that is nothing other than modern slavery. However, as soon as business owners started take opposition, the government passed legislations that guarantee the continuation of these injustices. On 29th August, the government forcefully passed its former propositions, despite demands from the workers against deterioration of labour laws and reduction of working hours without the sacrifice of women/small-to-medium/irregular workers.
2. KCTU’s tasks for struggle
1) Flag of equality against the neoliberal logic of competition
At the KCTU National Congress of 2003, the plan of action for the next 5 years focusing on 3 major social issues was more defined. The three issues were guarantee of basic rights of irregular workers, elimination of gap between rich and poor, and the strengthening of the three basic labour rights. The KCTU has lifted the flag of equality against the neoliberal ideas of competition. The KCTU has decided, in the social context, to struggle for the elimination of gap between rich and poor. Also, within the working class, inequality between regular and irregular workers, women and male workers, workers in large corporations and those in small-to-medium companies, and between Korean and migrant workers should be eliminated and fought against in solidarity. Finally, struggles must be implemented to strengthen basic labour rights, so that trade unions can be strengthened in order to carry out these struggles.
2) The three tasks for struggle against neoliberalism
The government, which had promised to solve the problem of irregular workers—a problem that widens the gap between rich and poor, and that is the biggest reason for discrimination among workers, has in fact gone in the opposite direction and expanded irregular labour. It has regressed the national pension scheme—a social welfare scheme for workers and the people—and has deteriorated social public interests. Also, to incapacitate the struggles of the workers, the government is trying to weaken basic labour rights and to strengthen the ‘counteraction rights’ of employers. In this situation, the KCTU has decided ‘regularisation of irregular workers’, ‘opposition to regression of pensions’ and ’resistance against repression of workers including the attempts to strengthen employers’ counteraction rights’ as its three main demands.
3) Anti-globalization struggles
- Resistance against WTO’s liberalisation of agriculture and services
The Doha Development Agenda(DDA) negotiations of the WTO are taking place, and US and the Cairns Group (group of agricultural exporting countries such as Australia etc.) are demanding liberalisation of all agricultural products through the elimination of tariffs and subsidies. The government, in the interest of national capital, is expanding its policy of sacrificing agriculture under the logic that the market for industrial goods should be expanded.
In accordance to the ministerial declaration of June 2002, the Korean government submitted requests in 12 areas in the services sector to 36 countries including US, Japan, China and the EC, and has registered the requests from 24 countries. It has then started bilateral negotiations with 18 countries. The US and EC have demanded liberalisation in areas such as legal services, accounting, education, medical and audio-visual services, and also in finance, telecommunications and environmental services. The Korean government then submitted its preliminary offers in March, 2003.
In September, the Korean delegation of 180 people consisting of KCTU, the Korean Farmer’s League and others went to Cancun Mexico to struggle against the WTO, and in the process one farmer sacrificed his life for this struggle. Although the WTO Ministerial collapsed, the WTO negotiations will go on. The KCTU will strengthen its solidarity with the peasants movement and further progress the anti-globalisation movement.
Resistance against bilateral and regional trade agreements
While the Korea-Chile FTA faces ratification in the National Assembly, the governments of Korea and Japan have agreed to start negotiations for the Korea-Japan FTA within this year. At the Korea-Japan-China Business Forum held in Seoul on 22nd November 2002, the two governments agreed on a ‘Seoul Declaration’ for the establishment of a FTA between the three countries in seven sectors including textiles, petrol & chemicals, steel, machinery, electronics, urban gas and logistics. At the ASEAN summit of October 2003, the three countries decided to define plans for the actual promotion of the FTA. The governments of Korea and Singapore, through a ministerial meeting in Sydney, Australia, in November 2002, agreed to form a joint study group to promote Korea-Singapore FTA and the study group will implement studies on target sectors, the boundary and guidelines on negotiations. The two countries are planning to start negotiations from the beginning of 2004.
Resistance against Free Economic Zones
The strongest liberalisation policy is manifesting itself in the form of Free Economic Zones. The government legislated a bill on the establishment of FEZs and in June, passed the enforcement ordinance for the bill to effectuate from July 1st. At the moment, local governments have applied for approximately 350 FEZs, and it is expected that they will be further expanded. Within the FEZ, clauses on domestic labour law and regulations will be incapacitated. As a result, irregular labour will be expanded and wages decreased, while education and healthcare liberalised causing the collapse of public education and health services. Regulations on environmental protection will also be lifted, causing environmental destruction. Thus, the KCTU formed solidarity with social movements and organisations against FEZs and has as its task, the continuation of struggles against the FEZs.
4) Struggles against imperialism and war, for peace
The Korean workers movement is placed in a special situation— the division between North and South Korea. There has always historically been military tensions on the peninsula, between North Korea and US. Recently, the military hegemonic strategies of the US in the Asian region have elevated the tensions. Workers are the primary victims of war and thus, it is inevitable that the KCTU has as one of its major tasks the struggle against war.
However, the issue of ‘anti-war’ is not limited to the special situation on the peninsula. US is in the core of neoliberal globalisation strategies of transnational capital, and the US is enforcing neoliberal globalisation through militarist hegemony around the world. Because most wars around the world that are taking place are basically imperialist invasions, the present anti-war/pro-peace movement has the characteristic of being also anti-imperialist. This is also another manifestation of the anti-globalisation movement. In 2003, during the US invasion of Iraq, the Korean government decided to send troops at the request of the US. Thousands of workers led by the KCTU implemented a sit-in in front of the National Assembly in resistance against the dispatch of troops. Even at present, Korean capital, under the rhetoric of ‘national interest’, are demanding dispatch of more troops and the Korean government has decided to send additional troops. The KCTU is implementing, in solidarity with other organisations and movements, struggles against the dispatch of military troops to Iraq.
VI. Proposals for the strengthening of the solidarity front of Asian workers against neoliberalism, globalisation and war
1. KCTU’s perspective on workers’ international solidarity
After the 1987 Great Struggle, the Korean workers movement has struggled hard against the repression of capital and the government, progressing from the Korean Trade Union Congress (Jeon-no-hyeop) to the present KCTU. During the process, we have received the solidarity and support of international working brothers and sisters, and the KCTU itself has made efforts to promote international solidarity.
Amidst the resistance against neoliberal attacks of the government and capital after the 1997 economic crisis, KCTU’s workers’ international solidarity has found a new direction. KCTU has realised that workers’ international solidarity, in a situation where the attacks of neoliberal globalisation of transnational capital prevail in all parts of the world, should have as its axes, anti-neoliberalism and anti-globalisation. In particular, with the attack of transnational capital being concentrated in the developing countries of Asia, Latin America and Africa, the biggest victims are workers in these regions, and the KCTU has realised in the process of its struggles that solidarity between the workers of the South has to be strengthened. To this end, the KCTU has strengthened its ties with COSATU of South Africa and CUT of Brazil. This solidarity is still in its first stages, and the solidarity of workers of the South against neoliberalism, globalisation and war must be further consolidated.
2. Let’s implement plans to strengthen workers’ solidarity in Asia against neoliberalism and globalisation
Workers’ solidarity in the Asian region is still in its preliminary stages. On the other hand, transnational capital is dominating all countries of Asia, and the formation of capital blocs are being strongly promoted through bilateral and multilateral free trade agreements. Workers in each country are in the danger of being divided and isolated to bear out the double or triple exploitation from capital in and outside of the respective country.
Thus, we must start from the exchange of basic information to formation of a common perspective on neoliberal globalisation and progress onto forming common actions. We need to form an elementary network for this end. We should also extend the solidarity of Asian workers to attain solidarity with workers in Africa and Latin America.
—Abolishment of lay-off and worker dispatch policies
—Reduction of working hours with employment and wage guarantee
—Formation of an unemployment fund of 20 trillion won through introduction of employment tax, reduction of military budget, redemption from jaebol owners and other illegal profiteers
—Strengthening of social welfare such as education, health, housing and reformation of taxation system
—Abolishment of jaebols
—Strengthening of the three basic labour rights such as the guarantee of the right to assemble for teachers, government employees and the unemployed
—Renegotiation with the IMF
KCTU’s three main demands
1. Regularisation of irregular workers and institutional reforms for elimination of discrimination
—Recognition of specially employed workers are workers and security of basic labour rights
—Abolition of worker dispatchment
—Limitation to short-term labour
—Reformation of minimum wage system
2. Opposition to regression of pension scheme and reformation of taxation system and government budget
—Continuation of 60% allowance for national pension
—Support of national pension by net-worth tax, recovery of tax omissions and cuts in military budget
—Operation rights of national pension to be given to subscribers
3. Stop to repression against workers and strengthening of basic labour rights
—Termination of attempt to institutionalise ‘counteraction rights of employers’
—Strengthening of basic labour rights by abolishing property seizure and confiscation