[Editorial] Fundamental Solution Needed for Temp Workers

A law took effect yesterday requiring companies to bring on temporary workers as permanent staff after two years of full employment. This has forced many companies to let go of temporary workers who have worked for two years. Twenty thousand to 30,000 temporary workers are expected to lose their jobs this month and 400,000 to 700,000 more will join the ranks of the unemployed over the next 12 months. Smaller companies, which cannot afford to bring on temporary workers permanently, will suffer a lot because of the extra expenses incurred in recruiting new staff after laying off skilled workers.

The ruling Grand National Party submitted a revised bill on the Non-regular Workers’ Act yesterday to the National Assembly’s Environment and Labor Committee. The party also proposed a meeting attended by six members from the ruling and opposition parties. Whether a breakthrough will come is unclear, however. Political circles, who say they serve the people, are too busy blaming each other, while 5.5 million temporary workers, most of whom are lower-income earners, stand to lose their jobs.

Mass unemployment of temporary workers was predicted when the Non-regular Workers’ Act was enacted in November 2006. The then ruling Uri Party, the predecessor of the main opposition Democratic Party, ignored the reality of businesses and the economy to push for the law, saying, “Companies are less likely to dismiss temporary workers before two years of employment because this will lead to a decline in productivity and increase in expenses for personnel management.” Though the mass dismissal of such workers became inevitable due to the growing number of temps, the previous Roh Moo-hyun administration and the Uri Party took no steps to resolve the problem. The incumbent Lee Myung-bak administration has been no different. Since its inauguration, the Lee administration has continued to drag its feet to avoid criticism before belatedly submitting a revised law to the National Assembly in April. In this regard, both the ruling and opposition parties should be held accountable for the situation.

Yet most of the blame should be placed on the Democratic Party. Since the Non-regular Workers’ Act is so unrealistic, its nickname is “the act to dismiss temporary workers. As Lee Hoi-chang, the chairman of the minor conservative Liberty Forward Party, said, the Roh administration and Uri “high-handedly” passed the law. Though Democratic Party members made a huge mistake by enacting the law two years ago, they have made no effort to correct this wrong.

Democratic Party lawmaker Choo Mi-ae, who is chairwoman of the parliamentary environment and labor committee, further hindered negotiations between the ruling and opposition parties by refusing the revised bill’s submission to the committee on the pretext of labor opposition. Even the Democratic Party has criticized Choo for her unilateral act, saying the refusal is an “individual political act.” Choo warned National Assembly Speaker Kim Hyong-o Tuesday that if he exercises his authority to submit the bill, the government will face the same fate as the Kim Young-sam administration in 1996, which became a vegetative after railroading a revised labor law through parliament. Does she intend to undermine the government by resisting the law revision and inducing the ruling camp to unilaterally pass the law?

The debacle involving the 1996 revised labor law Choo mentioned deserves close review. At the time, a revision to labor law was inevitable to meet international standards after Korea joined the Organization for Economic Cooperation and Development. Faced with vehement resistance from opposition parties and labor, the then ruling New Korea Party, the predecessor of the Grand National Party, unilaterally passed the revised law in December the same year. The continued conflict over the law led to delays in corporate restructuring and a decline in national credibility in the international community, which many experts cite as one of the reasons for the 1997 financial crisis. This is why former President Kim Dae-jung was partly blamed for the crisis.

The Democratic Party, which portrays itself as a party of the working and middle classes, is undermining its identity by refusing to cooperate in revising the law. The biggest victims of the failed revision will be the working and middle classes, the party’s supposed base. Seeking to stand with smaller companies, the party is contradicting itself by delaying the revision and turning a blind eye to the suffering of smaller companies. Under the pretext of opposition from the country’s two labor umbrella unions, Choo is refusing to pass the bill. By doing so, she is sacrificing the jobs of millions of temporary workers just to seek the favor of unions.

To prevent mass dismissal of temporary workers, the ruling and opposition parties should suspend the enforcement of the act and work on fundamental solutions. The problem with temporary workers is rooted in the labor market, which began turning rigid from 1987, when unions started turning to political and hard-line policies. As employment and dismissal of regular workers became difficult, companies have hired more temporary workers. Given this, the resolution of the problem will not come as long as the labor market remains rigid.

Europe since the 1990s has taken steps to create flexible labor markets and loosened regulations on temporary workers. Most European countries have no mandated periods for the employment of temporary workers. Such workers in the United States account for less than five percent of the U.S. workforce, the lowest among OECD member countries. This is because the U.S. labor market is so flexible that all American workers are like temps.

What temporary workers want is to keep their jobs and improve working conditions. Only when the mandatory employment period is scrapped and independent contracts between employees and employers are allowed, can labor market flexibility be enhanced, leading to a fundamental solution to the problem of temporary workers.