Labour Unions in The Republic of Korea: Challenge and Choice

Discussion pap ers
Labour unions in the

DP/107/1999
Republic of Korea:
Labour Challenge and choice
and
Society Ho Keun Song
Programme Department of Sociology,
Seoul National University
P.O. Box 6
CH-1211 Geneva 22
Tel.004122/7998496
Fax. 004122/7998542
E-mail: [email protected]
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Labour unions in the
Republic of Korea:
Challenge and choice
Ho Keun Song
International Institute for Labour Studies Geneva

Copyright International Labour Organization (International Institute for Labour Studies) 1999
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ISBN 9014-615-X
First published 1999
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Table of contents
1. Introduct ion: Unions in transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Labour politics and the structure of unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Labour politics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The growth and structure of unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Union growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Union str ucture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Union acti vities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Collective bargaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Routine activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Industr ial dispu tes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. Trade unions in the transition to democracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Democratiz ation in the Republic of Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The rise of democratic union ism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Unions in a reform democracy, 1993-1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4. Challenges to unions: Economic liberalization and globalization . . . . . . . . . . . . . . . . . . . 16

The impact of globalizat ion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Union struggle and la bour orientation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The economy, wages and employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Wages and employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5. Unions and the politics of crisis management: Labour reform and conflict . . . . . . . . . . 21
IMF regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Kim's power base an d the first Social Compact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
The limit s of tripartite n egotia tion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Unemployment a s a bottleneck . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Improvement of human rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6. Politics in unions: Leadership and recent issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Recent issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Difficulties of leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Union fina nce and exp enditur e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Exploring new resources for solidarity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7. Conclusion: Future tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
1. Introduction: Unions in transition
For many years unions in the Republic of Korea have struggled for democratic industrial relations
despite repressive policies which continued until the end of the 1980s. Unions have also played an
important role in the country’s remarkable economic growth. Since the industrial r evolution really
got under way in 1961, state and employers have considered unions as a danger to social stability
and economic growth whenever firms and factories are disturbed by labour disputes. Politicians and
employers have always maintained that workers involved in industrial disputes are imbued with pro-
socialist and communist ideology. This sort of anti-labour feeling is so deeply rooted in Korean
society that organizations such as unions, pursuing social justice and workers’ rights, cannot develop
normally.
Apart from public hostility towards trade unions, repressive labour laws were the most serious
impediment to union development. These laws limited union activity and blocked the intervention
of industrial unions in labour disputes and collective bargaining at enterprise level. Labour leaders
who dared to call a legal strike were likely to be arrested on charge of violating other regulations.
In the first half of the 1980s when authoritarian laws were strengthened, more than 2,000 labour
leaders were imprisoned. Many young and innocent workers, male and female, spent years in gaol.
This situation received international attention since labour repr ession generated serious problems
concerning human rights a nd workers’ rights. The labour movement remembers the 1970s and 1980s
as years of bitter struggle against political repression and unfair labour pr actices. During this period
there were massive and violent strikes at shipyards, automobile factories and steel mills, some of
which received worldwide attention, notably the labour disputes of 1987. These continued for four
months in most factories and workplaces in support of workers’ rights and better working conditions,
epitomizing the struggle against state repression and employers’ brutal and inhuman treatment.
About 1.3 million workers actively joined these disputes which were a watershed in Korean labour
history, not only in the number of workers mobilized but also in the impact on industrial relations.
The government had to accept workers’ demands unconditionally in face of the breakdown of
authoritar ianism. As a consequence, repression was relaxed, unfair labour practices largely
disappeared, workers’ rights improved, and unions gained some power to negotiate with government
and employers. The era of bitterness seemed to be over. But unions had to wait a few more years
before they had any real influence.
The labour movement had to enter an entirely new epoch after the political opening of 1987 and
went through a period of trial and error in adapting to a new environment. The upheavals of 1987
provided a good chance for workers to organize, so that many unions, big and small, were new. New
unions did not have the experience to organize the labour movement effectively and to manage labour
demand. Workers began to organize in all industrial sectors, but there was no coherent leadership
at the top level to control local unions and rank-and-file workers. Unions, old and new, realized that
they had to cope with entirely new issues regarding democratization and globalization. Thus, the
years after 1987 are a period of challenge and response, of success and failure, and of satisfaction
and frustration to Korean unions. They improved their orga nizing skills and capacity to manage
worker demand, but inter-union alliance and cooperation was seriously weakened by intensified
market competition.
The focus of this study is on the successes and failures of Korean unions since 1987. The paper
analyses the strategies and policies tha t unions have implemented in a time of democratiza tion and
globalization. It also sheds some light on the consequences, explaining how the labour movement has
2 D i s c u s s i o n P a p er s S e r ie s N o . 1 0 7
been affected, modified and split in the process, and how it has responded to new challenges. The
issues and problems that unions have faced are described in the analysis.
The paper is structured as follows. Chapter 2 provides some basic fact s on labour laws and
amendments, union density and development, apex bodies and organizational structure, leadership,
union movements and industria l strikes, the rules and regulations of collective bargaining and wage
negotiation. The next two chapters address the role of unions in democratization and economic
reform. Chapter 3 examines how organized labour was excluded from reform politics and how it
responded to the exclusion. Chapter 4 analyses employer efforts to cope with the pressure of
globalization, focusing on industrial restructuring and re-engineering and their consequences for the
economy. It explains why union orientation shifted from politics to economics and why working class
unity and allia nces between enterprise unions declined as labour market conditions changed.
The next two chapters concern union strategies and responses to structural change. Chapter 5
deals with union efforts in the reform of national labour law and describes negotiations with the
ruling party during the economic crisis of 1998. Labour law was amended twice in the 1990s. Was
this beneficial to industrial democracy? Was it conducive to improving productivity and
competitiveness? The amendments are the subject of heated debate on these questions among union
leaders. Policy packages under the IMF a re examined in the discussion of President Kim Dae Jung’s
labour politics. The chapter analyses how the government violated human rights by strictly enforcing
the national security laws on strikers and by having labour leaders watched by police and intelligence
agencies. The situation improved significantly under Kim Dae Jung’s government. Chapter 6 looks
at union organizations, conflict surrounding the emergence of new leaders, relations between
leadership and rank-a nd-file workers, union strategy in collective barga ining and wage negotiation.
The chapter examines recent issues, notably the question of improving their public image, which is
essential if unions are to influence society as a whole. They are now trying to expand their networks
and makes alliances with other social movements in order to develop common interests and
cooperation. They exchange information and share ideas on political and economic issues with
organizations representing new social movements. The paper concludes with a discussion of further
ways of improving unions’ contribution to social, political and economic reform and strategies for
adapting to globalization.
L a b ou r u n io n s in t h e Re p u b li c o f K o re a : Ch a ll e ng e a nd c h o i c e 3
2. Labour politics and the structure of unions
Labour politics
“Labour politics” refers to the policy packages implemented by government and employers to
achieve their own goals vis-à-vis organized labour. The term covers the political, legal and
institutional instruments regulating interactions between employers and unions in the workplace and
the limits imposed on collective action. It defines the legal status of unions, the structure of labour
relations, the procedures for organizing workers and the role of unions in politics and the economy.
Labour politics are structured through tripartite cooperation between government, employers and
workers in democratic countries, while they are enforced by an authoritarian state or monopoly
capital in non-democratic settings. The Republic of Korea relied on authoritarian labour politics until
1987.
The approach was authoritaria n not only in the workplace but in the control exer cised over
workers who rebelled against state policies. The government relied on violent and repressive means
to resolve industria l conflict and subdue worker militancy. The police and intelligence agencies
frequently intimidated labour leaders who expressed discontent and complained of maltreatment.
Industrial disputes were commonly terminated by violent police attacks prior to 1987. The state
legitimized repressive labour policies by stressing that workers should accept such pr actices until
economic prosperity was achieved.
Rapid economic growth was supported by authoritarian labour control, which squeezed
maximum productivity out of workers. Since authoritarian labour control was a common feature of
East Asian NICs, it is often argued that there is a structural affinity between export promotion
strategy and labour repr ession (Deyo, 1987, 1989; Deyo, Haggard, and Koo, 1987; Gereffi and
Wyman, 1990; Koo, 1987). The argument is particularly true of Korea, which made a radical turn
to authoritarian repression with increasing industrialization in 1972. During the Yushin regime
(1972-1979) state repression was enforced so strongly that organized labour could not expand its
activities and make demands without suffering reprisals.
The labour regime aimed at demobilizing and depoliticizing industrial workers. Demobilization
was designed to discourage unionization and destroy established unions which disturbed industrial
stability through frequent work stoppages and strikes in protest against state policies.
Depoliticization was designed to prohibit organized labour from political participa tion and deny
opportunities for partnership with the government. Organized labour has been regarded as a
necessary evil throughout the history of the Republic of Kor ea since the liberation. The odd
combination of rapid growth and anti-labour ideology is an interesting feature of the country’s
economic miracle. Repressive politics integrated the economy into a coherent policy of export-led
industrialization.
During the period of legal and political repression, the labour regime had some distinctive
characteristics: enterprise unionism, and administrative and political control. The enterprise union
is the basic unit of worker organization and activity. Only regular blue-collar workers within a firm
are entitled to join the enterprise union. Enterprise unions can be associated with the industrial union
and the Federation of Korean Trade Unions (FKTU), but a ffiliation is not obligatory. The state
vigorously constrains union activity within the workplace, defining the enterprise union as an
institution for settling grievances and maintaining cooperation between employer and employees.
Apex bodies at both industrial and national level cannot intervene in collective bargaining at plants.
They can only send policy recommendations and, sometimes, petitions to employers when collective
bargaining has reached a stalemate. According to a survey conducted by FKTU in 1983, only 3 per
cent of firms with 500 or more workers engaged in collective bargaining at all: in these firms
bargaining concerned only minor issues like paid vacation, work allocation, and some trivial aspects
of working conditions.
Second, the Ministry of Labour controls the administrative and legal functions of unions. A new
trade union has to get a certificate of registration from the Ministry, known as the Labour Office
until 1981. If no certifica te is granted the new union has to be disbanded. Before 1987, there were
numerous disputes about the certificate of registration especially when the Ministry, in collaboration
with employers, refused to issue a certificate to unions that fulfilled all the qualifications. The labour
code also empowered the Ministry to withdraw the legal status of established unions if they were
deeply involved in politically significant industrial disputes, or accused of agitating violent strikes.
Besides this, union leaders had to report on their activities and submit their annual budget to the
Ministry. If the annual budget was not used for activities permitted by the labour code, union leaders
could be charged with violating the law. Administrative inspection was an efficient way of
controlling unions involved in many troubles and disputes.
Third, the political control of unions relied on institutions such as the police and intelligence
agencies. While the Ministry of Labour inspected and supervised the daily activities of unions,
including disputes on working conditions, wage negotiation, and unfair labour pra ctice, the
intelligence agencies were mainly concerned with security. Their role was to pr event unions from
being connected with and affected by militant groups outside factories. It is not long since security
police disappeared from big factories and industrial parks. During the authoritaria n period, the
national intelligence agency frequently intervened in violent strikes which threatened political
stability. In these years, numerous workers were arrested on charge of violating the national security
laws and imprisoned. This explains why unions have pressed for abolition of the national security
laws, as promised by President Kim Dae Jung. Organized labour was thus surrounded with and
regulated by multiple types of surveilla nce. As a consequence, unions could not develop the
horizontal and vertical linkages which were essential to the growth of the labour movement. Union
activities were confined to the enterprise and those that tried to make alliances across firms were
subject to severe and violent repression.
Union leaders in str ikes had no legal protection from dismissal and arrest. Once they were gone,
it took a considerable time to reproduce leadership and to recover solidarity with the rank-and-file.
Making use of repressive measures, the state aimed at strengthening enterprise consciousness as an
essential element of the Korean tradition of paternalism. Employers were basically responsible for
the welfare of their employees as sons and daughters, in exchange for discretionary powers of
control. In reality, the system generated wealth for the state and employers but failed to include
employees in the benefits of high productivity because of its exploitative and repressive character.
As social ills such as inequality and political repression became worse, however, workers gradually
turned away from the illusion of government promises and began to engage in class conflict in close
association with revolutionary student groups. This explains why militant factions of the labour
movement were oriented to a radical socialist revolution instead of gradual social reform in the latter
half of the 1980s.
The grow th and st ructure of unions
Union grow th
The proportion of organized workers has risen a nd fallen over the last three decades according to
the political and economic climate, but overall it has fluctuated between 15 and 24 per cent. It seems
that 25 per cent was the highest organizing rate, during the years of rapid growth. Chun Do Hwan’s
regime (1980-1987) recorded the lowest figure: unionization was relatively higher during the Yushin
regime (1972-1979) than during the period of democratization after 1987. This does not mean that
union power to negotiate after the transition to democracy is weaker than in the Yushin regime. The
higher rate during the 1970s is mainly attributable to a rapid increase in the number of industrial
workers due to growth in heavy industry and chemicals, and also to relaxation of political repression
by President Park in the late 1970s. Controls were eased in order to placate growing discontent at
workplaces. Unions have grown dramatically in number over three decades although union density
has changed very little. Ten industrial federations have recently been established, the number of local
unions has tripled, and membership expanded from 200,000 in the early 1960s to appr oximately two
million in the early 1990s. The growth of unionization can be described under several headings.
First, five industrial federations were established during the labour dispute of 1987 by splitting
existing federations and unionizing previously unorganized white-collar employees. The Federa tion
of Korean Rubber Workers was created at this time, while newly organized workers included
insurance staff, taxi dr ivers, clerical and financial workers, and city subway workers. The new
federations had a progressive and somewhat radical orientation in contrast to the passivity that
FKTU maintained over many years. During 1992 five more new federations were created. These
brought together the unions representing journalists, hospital workers, university employees,
maintenance workers, researchers, professionals, and technicians. These federations sprang up
shortly after 1987 and were very active in the period of democratic transition, receiving state
recognition in 1992-93. This was a significant time in Korean labour history because it marked the
establishment of the first white-collar unions, which were unimaginable in the past. Federations of
white-collar unions fought hard for state recognition, in cooperation with pr ogressive groups of blue-
collar unions. After 1987 these industrial federations were allowed to decide freely whether to choose
FKTU as their national centre or to remain independent. As of November 1995, however, Korea
entered an era of multiple unionism at apex level as many unions formed another national centr e, the
Korean Confederation of Trade Unions (KCTU), competing with FKTU.
Second, local unions grew fast during the 1970s, reaching 5,000 at the end of the decade, but
then dropping sharply to just over 2,000. Chun Do Hwan’s regime was detrimental to union growth,
but the labour dispute of 1987 precipita ted an explosion of new activity, and almost 1,500 unions
sprang up within six months. Industrial workers had an unprecedented chance to organize in the
transition to democracy and almost 8,000 new unions were created in the two years after 1987, the
rate of organization rising from 15 to 23 per cent. But this was the high spot of the movement.
Table 1 . Grow th of unions
Year Industrial Local unions No. of Organizing rate

unions mem bers
Ma le Female Total
1963 16 2150 224420 20.8 18.5 20.3

1965 16 2634 301522 23.5 19.1 22.4
1970 17 3482 473259 20.1 19.7 20.0
1971 17 3507 497221 20.1 18.4 19.7
1972 17 3391 515,292 20.3 19.7 20.4
1973 17 3268 548054 20.3 20.0 20.4
1974 17 3784 655785 21.3 22.9 22.1
1975 17 4073 750235 21.4 26.6 23.0
1976 17 4371 845630 21.6 26.4 23.3
1977 17 4580 954727 22.6 27.9 24.3
1978 17 4857 1054608 22.7 26.2 24.0
1979 17 4947 1088061 22.7 25.0 23.6
1980 16 2618 948134 18.5 23.3 20.1
1981 16 2141 966738 18.5 21.6 19.6
1982 16 2194 984136 18.1 21.2 19.1
1983 16 2238 1009881 17.8 18.5 18.1
1984 16 2365 1010522 16.5 17.2 16.8
1985 16 2534 1004398 15.9 15.2 15.7
1986 16 2658 1035890 16.2 14.2 15.5
1987 (June) 16 2742 1050201 15.6 12.9 14.7
1987 (D ec) 16 4103 1267457 18.5 15.0 17.3
1988 21 6164 1707456 23.9 18.1 22.0
1989 21 7883 1932415 25.8 18.5 23.3
1990 21 7698 1886884 24.4 16.3 21.5
1991 21 7656 1803408 22.8 14.2 19.7
1992 21 7527 1734598 21.9 12.2 18.4
1993 26 7147 1667373 20.5 11.3 17.2
1994 26 7025 1659011 19.9 10.0 16.3
1995 26 6606 1614800 18.7 9.3 15.3
1996 26 6424 1598558 18.4 8.4 14.7
1997 26 17.5 7.0 13.5
Source: Korea Labour Institute: KLI Labour Statistics (Seoul, Korea Labour Institute, annual).
Third, the proportion of organized workers culminated at 23.3 per cent in 1989 due to expanded
political opportunity, falling back to 13.5 per cent in 1997. The rate will probably go up again to
about 20 per cent when the new labour laws allowing teachers and public sector employees to
organize comes into force in 1999. It is nota ble that the trends for male and female workers crossed
in the mid-1980s, when more men were joining unions but fewer women. This cross-over was
associated with the transformation of Korean industry from labour-intensive to technology- and
capital-intensive production. The centre of the labour movement shifted from unskilled women
workers in light industry in the 1970s to skilled male workers in the 1980s. T he shift altered the
goals and orientation of the labour movement, as detailed in a later chapter.
Union structure
The structure of unions in Korea is relatively simple, since the state did not permit multiple unionism
until recently, and enterprise unions were the basic unit of national organization. For many years
the Federation of Korean Trade Unions was the only national centre which had official status.
However, competing groups of organized labour set up another centre in November 1995, which
they called the Korean Confederation of Trade Unions (KCTU).1 The new centre brought together
progressive and active unions which were dissatisfied with FKTU. The new national centre strove
for government recognition as a legal organization, and this was finally achieved in 1996.2 Thus,
organized labour in the Republic of Kor ea has two national centres. Labour laws stipulate that
enterprise unions can join a national centre but not individual workers. However, enterprise unions
are more closely affiliated with industrial federations than with national centres. Although the
national centre is an apex body regulating both industrial unions and enterprise unions, labour
leaders at workplaces tend to regard the industrial federation as their supreme organization. T he
national centre is remote from rank-and-file workers in unionized factories. T he tie between
industrial federation and enterprise unions tends to be stronger in industries such as textiles and
metals, which have had industry-wide collective bargaining for a long time. In general, however,
membership in a higher organization meant little because of labour laws that prohibited third party
intervention in disputes at the workplace. But now it is likely that the amendments of 1996 and 1998
which abolished the prohibition will make vertical links stronger and more meaningful in the near
future.
Another sort of federa tion grouped the occupational unions which mushroomed in white-collar
sectors shortly after 1987. Among the 12 federations of occupational unions that were active at that
time, six were successful in getting legal recognition by 1993. T hey launched another apex body,
the Korean Congress of Independent Industrial Trade Union Federations (KCIIF) in 1990. Thus,
three kinds of apex body emerged during the transition to democracy.
Union activities
Collect ive bargaining
Unions are mainly concerned with collective bargaining and daily routine activities. For a long
period, authoritaria n governments banned enterprise unions from engaging in collective bargaining.
Instead, the Labour-Management Cooperative Council (LMCC) was set up to deal with working
conditions and grievance settlement, while unions were concerned with welfare and safety in the
workplace and also outside. The Ministry encouraged monthly meetings of the LMCC, which was
composed of managers and worker representatives, and mandated to report on its discussions and
decisions to the government. A department of the LMCC was established in the Ministry of Labour
to guide and regulate the Council and to send guidelines on state policies to all factories. Collective
bargaining was not illegal but was politically banned.
But rules and customs changed dramatically after 1987. Most enterprise unions, old and new,
claimed the right of collective action and wage negotia tion, sometimes with support from the
industrial federation, but mostly on an independent ba sis. It was a tr adition to carry out collective
bargaining and wage negotiation separa tely in the Republic of Korea, even under an authoritarian
government. Wage negotiations take place in all industries every spring, as in Japan, while collective
bargaining begins early in September and continues until November or December. The system
probably originated when the Japanese implanted company welfarism in the colony. Unions deal with
job security, worker par ticipation in management and welfare issues through collective bargaining.
This dual system actually prolongs the bargaining period over the entire year. However, a consensus
between employers and unions emerged in the early 1990s on ways to curtail institutional
inefficiency and reduce unproductive costs. The result was a rapid shift from the dual system to a
single round of negotiations. Now, most large firms hold wage talks and engage in collective
bargaining simultaneously.
Routine activities
Since 1987 enterprise unions have been overwhelmed by large and small demands from rank-and-file
workers. Employees in trouble resort to union representatives first instead of seeking help from the
head of their production team or a supervisor a s in the past. This shows that unions have gained the
confidence of the rank-and-file in most factor ies. To counteract the increasing influence of union
representatives in the workplace some employers have attempted to strengthen the managerial
hierarchy by giving more power to section heads and supervisors. This caused serious conflict
between employers and unions concerning the direction of managerial innovation in the early 1990s.
In addition to dealing with the concerns of individual workers, most large unions have started to
publish newsletters which discuss broad labour issues ranging from unfair labour practice to firms’
reinvestment schedules.
According to a survey (Yee and Kwon, 1995, p. 180), the priority activities for unions are: wage
negotiation, worker welfare and fringe benefits, industrial accidents, organizationa l consolidation,
job security, solidarity with other unions, work sharing, union democracy, job grading, development
of policy packages, abolition of discrimination, and reform of work organization.
Industrial disputes
Unions in the Republic of Korea are well-known for their militancy. Labour militancy is ascribed
mainly to a repressive state that closes the political space through which organized labour expresses
and accomplishes its political and economic demands. Factory size and worker homogeneity are
other factors enhancing militancy. Chaebol firms (conglomerates) employ over half of all industrial
workers and they are not split into different groups by race or religion. Some researchers argue that
a high degree of egalitarianism in national society is conducive to labour militancy, which is
interpreted as an expression of frustrated upward mobility and income disparity (Kim, 1992).
It is widely accepted that the main causes of labour militancy are political repression and
perceived economic inequality. These two factors are closely interwoven in an authoritarian setting
in which the ruling groups always emphasized a “development-first-and-distribution-later” policy
when confronted with worker demands. The worker challenge has taken various forms according to
perceptions of isolation and discrimination. As economic success reduced absolute poverty in the
1970s, the focus of discontent shifted to the relative deprivation that most workers thought was the
result of government reluctance to distribute wealth equally. Worker discontent was amplified by
illegal property accumulation through speculation and corruption. Bognanno (1988, p. 435)
observed: “at some point during the past five to ten years workers and the public seemed to shift
from a concern over absolute poverty to a concern over relative poverty.”
Relative poverty and corrupt links between politics and business explain the “strange paradox”
that although Korean citizens, including industrial workers, received economic benefits, workers
expressed anger at their government, political leaders and business managers (Lindaeur et al., 1997).
Research identifies four factors which explain the par adox: the excessive prolongation of
authoritarian controls that favoured management over workers; outrage at disrespectful treatment
by super iors; an acute sense of relative deprivation; the perception that wealth was acquired by
illegitimate means (pp. 111-113).
A great many industrial disputes occurred after decades of rapid economic growth. Unions were
well-prepared to embark on strikes, demonstrations, and sit-ins at a time of frustrated collective
bargaining, illegal dismissals, and unfair labour practices. But a car eful look at the statistics reveals
that, except at the time when the government changed, there were relatively fewer industrial disputes
in the Republic of Korea than in some advanced European countries such as France and Italy. The
two periods around 1980 and 1987 were extr emely unstable. In 1980, most industria l workers took
part in strikes and demonstrations, demanding political freedom, equal distr ibution of wealth, and
humane treatment. In that year, a violent revolt occurred in a mining village in protest against a
supervisor’s appropriation of worker wages and an employer’s unfair labour practice. The industrial
disputes of 1987 are known as the “Ulsan Typhoon” since they were ignited by violent turmoil in
the Hyundai Heavy Industry Co. located in Ulsan. About 1. 3 million workers in 3,300 fir ms all over
the country were involved in these disputes. This was unprecedented in Korean labour history. Blue-
collar workers fiercely attacked employers and managers in a kind of class war. This vociferous and
unstable atmosphere continued over two more years of numerous industrial disputes. But the
frequency of disputes has declined since the early 1990s and fell below one hundred in 1997.
Labour statistics on type of conflict, number of participants and working days lost indicate that
work stoppages and sit-ins are the most common type of dispute in Korea. Whereas industrial
disputes were ignited mainly by wage-related issues in the 1970s, workers’ concern shifted to
diversified issues including collective bargaining, dismissal, and unfair labour practices in the 1980s.
3. Trade unions in the transition to democracy
Democratization in the Republic of Korea
Undoubtedly, the Republic of Korea has made remarkable progress towards democracy since the
political opening of 1987. First of all, the machinery of authoritaria n politics was removed and the
rules of fair competition were introduced into the political and economic arenas. National politics
now satisfy the criteria of procedural democracy suggested by Dahl (1971). In 1998 the door was
opened to organized labour when worker representatives were invited to take part in tripar tite
negotiations, i.e. almost ten years after the political opening. Although the ruling par ty invited
organized labour to the politics of crisis management in January 1998 under IMF r egulation, how
far this process will go and how it will be institutionalized remain uncertain.
How have unions organized their struggle for better democracy? What did they do during the ten-
year transition to democracy? What are the political and economic consequences of the struggle?
How have unions themselves been affected? T he present chapter addresses these questions. It is
helpful to begin with a brief description of the democratization process with regard to the structural
obstacles that hindered the political participation of organized labour at national level.
Democratiza tion proceeds through three consecutive phases; political opening, transition and
consolidation (O’Donnell and Schmitter, 1986). It is widely accepted that the Republic of Korea
successfully passed through the first two phases in a short span of time. Political opening began
with the general election of February 1985, when the opposition party won a majority in the National
Assembly. This phase culminated in the Announcement of 29 June 1987, which set out the political
concessions to civil society. The country began its transition to democracy with the Rho Tae Woo
regime (1987-1992) at the end of 1987. The Rho regime can be defined as a restricted democracy
since it reduced politica l repression but the nucleus of power remained unchanged from the previous
Chun regime. Its contr ibution to democratization was the appointment of Kim Young Sam, an
opposition leader, as presidential candidate for the ruling party. T his appointment meant the end of
authoritarianism strongly backed by the military. The Kim Young Sam government (1993-1997),
the first civilian government since the military coup of 1961, started democratic consolidation by
carrying out a series of reforms during the first half of its term. But the effort was only partly
successful due to the lack of political skill and strong reactionary attacks from conservative power
groups. Consolidation is protracted. Although it is too early to sa y whether it will proceed
successfully under the Kim Dae Jung government (1998 present) there are many positive signs.
What role did organized labour play during these three phases? Did unions succeed in expanding
organizational and political space as a supr eme goal of the labour movement? Have they
strengthened their bargaining power vis-à-vis the government and employers? It is notable that
organized labour actually gained much less than it contributed to democratization. Organized labour
pushed the authoritaria n regime to relax political repression by calling mass strikes in the years after
1985, and it expanded the organizational foundation of opposition movements by making alliances
with student and religious groups. Finally, it triggered the transit ion to democracy in 1987 by
repudiating labour laws that upheld authoritaria n repression. The abolition of authoritaria n rules and
the achievement of political freedom are by no means negligible. But labour pr oblems were not
included in the package of reform policies of the Kim Young Sam government and it was not until
April 1996 that the government announced the schedule of labour reform.
Gains are observable in the fact that wage and fringe benefits almost doubled in a short time.
Although many warned that the sudden increase in labour costs would eventually ruin national
competitiveness it was more urgent to satisfy worker demands than to avoid future economic
problems.
Democratiza tion in the Republic of Korea shows distinctive characteristics. First, the process falls
into the category of reform democracy rather than rupture democracy. Reform democracy occurs
when old authoritarianism does not collapse completely and politica l power is shared between the
old élites and opposition leaders. In this model, authoritarian élites adopt a pa ssive strategy to
accommodate the demands of opposition groups. The advantage of reform democracy is that political
stability is maintained throughout the process, but fundamental changes are hardly expected. In the
Republic of Korea democratization resulted in the removal of authoritaria n rules but there was no
fundamental change in the party system, electoral system or power structure. In these circumstances
it was natural that labour codes remained almost untouched until 1996, and organized labour had
no part in reform politics.
Second, Korean politics do not reflect class interests since these were long suppressed by
authoritarian governments that gave priority to public rather than private interests, and national
rather than individual ca uses (Stepan, 1978). In this context, labour leaders could not penetrate the
power nucleus that was monopolized by politicians.
Third, organized labour did not have access to “the ultr a-élitist agreements” which facilitated the
transition to democracy. Political agreement commonly emerges in a period of transition to minimize
socioeconomic costs and political instability. But in the Republic of Korea, organized labour was
alienated not only from these ultra-élitist agreements but also from policy implementation in the
absence of “a social pact”.
The factors described above determined union experience during ten years of democratization.
The consequence is the disparity of union power between national and enterprise levels: union
influence is still limited at national level, while it has grown much stronger within the firm. Bridging
this gap became the supreme goal of union movements after 1987.
The rise of dem ocratic unionism
A careful examination reveals that the labour dispute of 1987, called the “Ulsan Typhoon”, was not
an organized and strategic strike with a clear purpose but an explosion of worker protest against
authoritarian repression. Thus, it seemed that meeting worker demands was the best str ategy for the
state in crisis. The government accepted and announced its intention to reform the labour code. The
strike gave an impetus to the emergence of informal and progressive groups of workers, who
developed a revolutionary and socialist ideology. These groups initiated strikes and street rallies
during the labour disputes, supported by student activists, religious groups and political opposition
factions. They emphasized the importance of unionism in eradicating authoritaria n repression and
achieving the “liberation of labour ”. More radical factions of workers proclaimed a socialist ideology
as the most viable ideological weapon against the state and monopoly capital. Consequently, the new
unionism grew in pursuit of the liberation of labour and presented a radical and progressive vision
of future society. Establishing the Korea Trade Union Congress (KTUC), an apex body independent
of FKTU in 1990, unionists rigorously pursued the amendment of labour codes as the platform for
mobilizing workers. The new unionism was known as “democratic unionism” because of its goal of
abolishing authoritarian repression.
A close look at the components of the new unionism gives us useful information about the origin
and nature of democratic unionism. First, the new unionism developed in labour-intensive industries,
characterized by low wages and long hours of work. During the 1970s, a period of heavy
industrialization, the labour movement was mainly led by workers in textiles and electronics. They
adopted desperate means such as suicide and self-immolation to protest against labour repression
under the Yushin regime. A militant and revolutionary vision of the new unionism was the legacy
of the labour movement in this sector. It also indicates that the new unionism, which had a radical
and militant orienta tion, could not easily penetrate capita l- and technology-intensive manufacturing.
Second, owing to its industrial origin, the new unionism had a closer affinity with young female
workers at the lowest level of the labour market pyramid. Simply put, workers in lower and less
advantageous positions were more likely to support democratic unionism than FKTU compliance
with authoritarian rule. The disparity by age and sex is also closely associated with the generational
change in the labour movement. The rise of democratic unionism was closely associated with the new
generation of workers who were less tolerant of economic inequality and political repr ession. This
was the result of a learning process that was closely linked to student movements and to the presence
of student activists in factories.
Third, KTUC workers strongly pursued the “liberation of labour” as a common vision of future
society. However, its meaning and the strategy to achieve it showed wide variation. The moderates
thought of the liberation of labour in terms of economic affluence but the radicals thought in terms
of the political domination of the working class over the state and the bourgeoisie. While the
moderates asserted that power should be gained through electoral means, the radicals used
revolutionar y methods to build a socialist society as an alternative to bourgeois politics. Since the
revolutionary ideology was, of course, a menace to the National Secur ity Law, the state imprisoned
a number of students and union activists when KTUC was established. This created human rights
issues that will be described later.
Comparing the power of FKTU and KTUC, it was reported that KTUC workers numbered
193,000 when the Congress was established compared with 1,739,000 in FKTU. This means that
KTUC membership was only one-tenth that of FKTU and only 2.7 per cent of the industrial
workforce. Simply put, KTUC represented only a small fraction of industrial workers with a radical
and militant ideology. Though the new unionism successfully launched its apex body as the
headquarters of worker struggle, it faced formidable pressure. The pressure included state
repression, the lack of consistent programmes, and competition with FKTU for members. It is
understandable that the democratic unionism could not assure autonomy from the beginning.
Unions in a reform democracy, 1 9 9 3 -1 9 9 6
The reform politics of the Kim Young Sam government excluded organized labour from
policymaking and implementation. Although it sat isfied the requirements of formal democracy,
political power was largely monopolized by individual élites who were loyal to the former leader of
the opposition. In contrast to claims made in his election campaign, President Kim did not offer an
opportunity to social groups to participate in central politics. Instead, he attempted to bring the
leaders of social movements into the ruling par ty as members of the Assembly, and appointed
influential leaders to important government positions. Organized labour was no exception. Some
prominent figures in the labour movement became members of the Assembly, while other s became
independent researchers on labour problems or consultants on labour relations. Political
democratization at state and national level weakened political unionism, which emphasized inter-
union cooperation and collective action.
Nevertheless, organized labour continued trying to strengthen its influence on politics and the
economy. Union leaders adopted various strategies to increase their political influence; these included
attempts to establish a labour party, strengthen industrial unions, amend labour laws, and construct
a strong national centre by mobilizing the unorganized. Competition between two national centres
was a noticeable feature of this period. The centres were FKTU and KCTU (Korean Council of
Trade Union Representatives, which was established by combining KTUC and KCIIF in 1993). In
1995, a new KCTU-Korean Confederation of Trade Unions was created. The two national centres
sometimes cooperated in pressing the government to start amending the labour code, but there were
significant differences between the centres in their approach to most labour issues. Government
opened channels for negotiation and discussion only to FKTU because KCTU was not officially
recognized. KCTU grew faster in size and influence in the first half of the 1990s by incorporating
large unions in strategic industries such as automobiles, shipbuilding and metals. FKTU abandoned
its passive and submissive attitude to government in order to cure the identity crisis accelerated by
its declining membership, but this strategy did not slow the growth of KCTU. KCTU functioned as
a centre of the working-class struggle during these years. As a centre of democratic unionism KCTU
gained great influence over most large unions in manufacturing industries, as well as over the new
white-collar unions. What did the centres do in these years? And what were the main goals they
pursued? These can be summarized as follows.
First, amendment of the labour laws was the prime goal that FKTU and KCTU pursued together
without discord. The two national centres demanded the repeal of laws which violated ILO labour
standards, insisting that the ban on politica l activity and third party inter vention in labour disputes
should be abolished first. However, the state did not accept this demand since it would have meant
a fundamental change in labour relations, giving more power to unions.
Second, the demand for third pa rty intervention was closely related to the long-term goal of
strengthening industrial unions. Industrial unions were a desirable alternative to company unions,
as these limited union activity to the enterprise. While the state objected strongly to industrial
unionism, the national centres made strenuous efforts to accomplish it. Local union attitudes varied
according to labour orientation. A survey reported that labour leaders at plant level who favour ed
enterprise unionism outnumbered those who prefer red industrial unionism (Song, 1992). A survey
conducted by Song in 1992 gave further support to this finding. The study of 250 labour leaders in
small and large manufacturing firms dealt with union activities, worker attitudes, financing, and
other issues. It seemed that labour leaders had less tolera tion of control by a higher organization.
Political liberalization with economic recession pushed labour leaders to be more inward-looking.
Third, KCTU lobbied the government to legalize multiple unionism at both national and firm
levels. FKTU strongly opposed this for fear that multiple unionism would wipe out the FKTU
advantage and make collective bargaining less effective at workplaces.
Fourth and finally, the two national centres put the emphasis on rapid and broad-based social
reform. They pressed for the eradication of links between politics and business, punishment of
corrupt politicia ns and bureaucrats, the introduction of transparency in banking transactions, and
finally, tax reform. In April 1993, FKTU accepted wage concessions on condition that the
government would immediately implement social reforms. Even though KCTU criticized FKTU’s
decision at that time, it did not repudiate the social reforms set out in the wage agreement.
In this respect, the contribution of organized labour to democratization is not negligible. It put
formidable pressure on government to implement a package of reform policies, regardless of the final
outcome. But organized labour continued the struggle to gain its goals until April 1996 when
government announced the schedule for labour law amendments.
It is peculiar to the Republic of Korea that white-collar unions collaborated with blue-collar
unions in pursuit of social reform in the process of democratization. Most white-collar unions
emerged shortly after 1987 as a result of political concessions to worker demands for union freedom
(see table 2 for unionization of white-collar workers). Of the many new unions those representing
journalists, hospital workers, clerical and financial workers were influential in terms of size and
activities. The journalists’ unions achieved solidarity and extended a strong influence on the media
through a massive and violent strike at KBS, the public television station, in 1990. They demanded
free speech and protested against government control over news broadcasts and other programmes.
Workers in all the media joined and supported the KBS strike as a symbol of resistance to state
control. The journalists’ unions thus ear ned an image of pioneers at the frontier of democraticlabour
relations. In 1993, six out of 13 white-collar unions acquired legal status through decisions of the
Supreme Court. The str uggle of the hospital unions to acquire legal recognition is well-known.
Members of these unions were mainly nurses, mechanics and other low-paid workers who had many
complaints about working conditions. Their demand for better conditions was naturally connected
to the quality of public service. The clerical and financial workers’ unions made it their prime goal
to implement banking transactions under real names immediately. They claimed that new institutions
were needed to eliminate corrupt links between politics and business. It should be pointed out that
worker demands for economic well-being and better working conditions included social and political
reforms in the three sectors represented by the unions of journalists, hospital staff, and financial and
clerical workers.
The white-collar unions established a national centre to organize workers and promote
independent occupational unions. In May 1990, the Korea Congress of Independent Industrial Trade
Union Federa tions (KCIIF) was created as an umbrella organization for white-collar unions. It
participated actively in general strikes, street rallies, and other public events demanding amendment
of the labour laws and union freedom in support of KCT U. (Needless to say, some elements in
KCIIF were closer to FKTU.) But, in general, KCIIF contributed to social and political reform by
improving the quality of public services and pressing government and employers to change the
authoritarian regulation of jobs and workplaces.
The white-collar unions are significant in three respects. First, they are occupational unions
mobilizing workers in similar jobs with no distinction between private and public sectors.
Occupational unions can easily penetrate the public sector in spite of the legal ban on unionization.
Thus, the emergence of white-collar unions was a serious threat to state labour regulation. Second,
they have a strong preference for industrial unionism because of occupational similarities across
firms. Third, it is highly likely that their economic interests are associated with social and political
reform since their jobs are mainly in the public services. These features are well described in an
analysis of white-collar unions by Suh (1998, p. 9).
The two characteristics of the contemporary white-collar movement in Korea - the

promotion of social reforms and the intensification of int erunion solidarity - are,
therefore, a repr oduction of the historical tradition of the labour movement on the one
hand, and the r epresentation of white-colla r workers’ col lective will to overcome the
weakness of enterprise unionism on the oth er. In view of the institutional and
structural context, it is remarkable that the contemporary white-collar labour
movement in Kor ea, even in its beginni ng stage, i s in a transit ion period fr om
business unionism to social unionism and from enterprise unionism to industrial
unionism .
Table 2. Some features of f ederat ions of occupational unions
Name Date of No. of Me mb ership

e s t ab l is h m en t affiliated
unions
Council of Researchers’ Professionals’ 32339 38 12000

and Technicians’ Unions
National Federation of Clerical and Financial 27 Nov. 1987 85 25000
Workers’ Unions
National Federation of Journalists’ Unions 26 Nov. 1988 43 13600
National Federation of Hospital Unions 17 Dec. 1988 98 35000
Council of Democratic Publication 16 Jan. 1988 18 1752
and Press Unions
Nat ional Council of Uni versity 1 Feb. 1999 54 9200
Employees’ Unions
National Council of Unions of Facility 28 Jan. 1989 50 4500
Maintenance Employees’
4. Challenges to unions: Economic liberalizat ion

and globalization
The impa ct of globalization
As political liberalization contributed significantly to the introduction of “new rules of the game”
in the political arena, so open competition was encouraged in the national economy. In the state-led
capitalism practised in the Republic of Korea, the market had long been distorted by government
intervention. Strategic industries and big business enjoyed tremendous benefits in the shape of cheap
loans, tax exemptions and tariff rebates. The government invested heavily in strategic industries and
protected big business from foreign competition. But the structure of market competition suddenly
changed as the state retreated from the forefront of the national economy in response to external
pressure to open national markets and follow the international trend towards free trade.
Changes in economic structure and in markets took place in two stages: economic liberalization
from1988 to 1993 and globalization from 1994 to the present. This distinction is peculiar to the
Korean context in that people began to pay attention to globalization when the Kim Young Sam
government used the concept (segeywha in Korean) as a political slogan. The economic changes a fter
1987 were understood as a parallel between economic liberalization and political liberalization with
a withdrawal of state intervention in the national economy. In fact, globalization attracted public
attention with the sudden collapse of socialist countries and the establishment of WTO in 1993, as
a consequence of the Ur uguay Round. However, neither government nor business knew how to
prepar e for the changes in world mar kets. Organized labour was no exception.
The Kim Young Sam government turned the focus of economic policy onto globalization in 1994,
when the national economy entered a serious recession as a consequence of incomplete industrial
restructuring. At that time the Korean economy was fully incorporated into the global economy. In
the global economy, capital and services move fast and without restriction across national
boundaries, due to advanced information technology. As many writers stress, globalization
fundamentally changes the traditional relations between capital and labour since it enhances the
fluidity of capital and services across nations, while information technology lowers the input of
labour in manufacturing goods. In a global economy capital can move anywhere in pursuit of cheap
labour and less regulation. Thus, globalization reduces employers’ need to negotiate with unions
when they demand higher wages and better protection. Globalization has become so universal in
capitalist countries that business takes full advantage of it to avoid challenges from unions and state
regulation, while unions have to lower their voice to maintain job security in the face of flexible
production. Just as unions in advanced capitalist countries are all in trouble under a global economy,
so the worldwide change may inflict a fatal blow on the Korean unions which have only just settled
after from the turmoil of 1987.
First of all, the introduction of flexible production is a menace to unions. Flexibility has three
distinct aspects: employment, wages and skills. Employment flexibility means job instability for
workers and a fundamental change in their perception of firms. Workers are no longer paid by
contribution and seniority but according to merit and ability once wage flexibility is introduced.
Finally, workers are obliged to learn a range of skills in prepa ration for product diversification and
new production technology. The shift in managerial strategy to flexibility was a great shock to
Korean workers who were familiar with life-long employment, high commitment to the firm and a
seniority-based wage system. Management attempts to introduce flexibility thus provoked very
severe conflict between capital and labour. The situation caused tension during the Kim Young Sam
regime from 1993 to 1996, but unions had to accept these changes when the government decided to
join OECD in 1996. The changes brought about by flexible production and union response can be
summarized as follows.
First, numerous workers lost their jobs because of the closure of many labour-intensive firms,
notably in the clothing industry and textiles. Rising labour costs were the main reason for
bankruptcy, and many employers decided to move to less developed countries in central America and
South-East Asia in search of cheaper labour. Capital flight and overseas investment affected the
industrial parks and export-processing zones where light manufactur ing was concentrated. This
caused a sudden drop in the membership of FKTU and KCTU during these years.
Second, the conglomerates began to downsize and lay off workers in order to reduce their debts
and increase profitability. This was the first time that the employees of conglomerates experienced
job instability and the collapse of life-long employment. FKTU and KCTU expressed strong
opposition to the managerial strategy but could not stop it.
Third, the privatization of state-owned enterprises and public services was a controversial topic
because of their accumulated deficits and negative effect on economic growth. Globalization
legitimized and strengthened the argument that public enterprise cannot compete with the private
sector in terms of efficiency and productivity. It is commonly accepted that a bureaucratic hierarchy,
lack of incentives and guar anteed job security are the main fa ctors undermining efficiency and
productivity in the public sector. When government started to discuss the possibility of selling and
privatizing state-owned enterprises in 1994, public-sector unions expressed strong and persistent
opposition, and called a general strike when it was carr ied out. As the public utilities had long held
a monopoly position, the unions in that sector were well-organized with a high commitment to
leadership. Thus, the government inevitably collided with strong unions such as the Korea Electronic
Power Corporation and Korea Telecommunications. Public-sector unions set up a joint committee
to oppose privatization and waged serious and violent struggles in 1994 and 1995. KCTU supported
the struggle and public-sector unions became the main agent of so-called democratic unionism. The
confrontation continued until 1998 when the Kim Dae Jung government announced an official
schedule of privatization to overcome the economic crisis. At this time, no opposition was heard
because it was channelled thr ough tripartite negotia tions that included FKTU and KCT U.
Fourth, the conglomerates took huge foreign loans in order to move into new areas such as
information and financial services as a means of industria l restructuring. Unfortunately, the new
industries in which they invested had little effect on job creation and the reduction of unemployment.
Instead, financial deficits accumula ted and eventually exploded into the foreign debt crisis of
December 1997.
Union struggle and labour orientation
FKTU and KCTU began to cooperate in the struggle to gain managerial initiative. From 1993 to
1995 there were large-scale strikes against the government’s privatization policy and downsizing in
the conglomerates. T he national centres, FKTU and KCTU, cooperated closely at this time to
achieve their common goals of maintaining job security and pr otecting the rank-and-file from
massive lay-offs. They also drew up alternatives to the new wage and promotion system that big
firms were trying to introduce. Employers wanted to reduce the seniority element in wage scales and
promotion systems and to reward workers according to merit and ability. Unions contended that this
would undermine the national employment system which maximized worker commitment to the
company. In spite of strong union opposition, the new pay schemes and promotion systems were
gradually introduced in most big firms during these years and FKTU and KCTU finally set the
amendment of labour codes as a new target.
The conflict surrounding job secur ity and pay schemes significantly affected labour orientation.
First of all, political unionism began to lose its attr action for the working class. The “democratic
unionism”, which was associated with politically active and radical factions of the working class,
dwindled and shrank. Attention was focused instead on union democracy. This does not mean that
political unionism died out completely or disappeared from the scene. There was a disparity between
the national centre and local unions. As Ramos (1981) obser ved in the case of Japan, while the
national apex body attempted to pursue worker interests through political routes, local unions were
more concerned with economic well-being and better working conditions.
The rapid economic transition altered the structure of the labour market. Workers who were laid
off by large firms tried to find new jobs in the service sector. Small-and-medium-sized firms in
competitive industries went out of business or relocated to less developed countries in search of
lower wages. Managerial innovation and industrial restructuring fra gmented the labour market and
disrupted industrial relations. Incr easing heterogeneity in la bour markets and intensifying mar ket
competition turned yesterday's colleagues into today’s rivals.
The economy , w ages and employm ent
The turn to a market-oriented policy yielded considerable results in the first half of the 1980s owing
to the sudden economic recovery in world markets and an improvement in the domestic industrial
environment. High economic growth continued until 1988. Surprisingly, the political turmoil and
labour disputes of 1987 did not disrupt economic growth. On the contrary, the growth rate was over
10 per cent for three years before and after 1987. A sudden drop occur red in 1989 and the decline
continued thereafter. Although there were no signs of crisis in terms of economic indices, the
economy has experienced various “crisis phenomena” since 1989 (see table 3 for economic indices,
wage trends and employment). T he Rho and Kim governments warned that economic decline would
result from political turmoil and labour unrest. Unions accused the government of using the term as
a political tactic to suppress the legal demands of workers. For instance, an official alert about
economic recession was made every spring when wage negotiations star ted in all industries. Almost
a decade after 1989, and after government warnings of recession, numerous crisis symptoms were
actually observed. They included a growing balance of payments deficit, high inflation, 3 wage hikes,4
excessive expansion of service-related consumption, external pr essure to open the domestic market
especially from the United States, and finally, the decline of international competitiveness. The GNP
growth rate was only 5 per cent in 1992, the lowest since the collapse of the Yushin regime. This
rate, still better than the European average, was hardly acceptable to the Korean people who had
become accustomed to high growth of about 10 per cent for many years. The economic crisis
afflicting the Roh and Kim governments had many causes: exhaustion of the government’s export-
promotion strategy, the partial failure of structural adjustment in industry, delayed technological
upgrading, market opening to for eign manufacturers and foreign capital, and skyrocketing labour
costs caused by the wage explosion after 1987.
Table 3. The economy, w ages and unemployment: Increase rate (%)

Year GNP Investment CPI R e al w a g e Unemployment
1971 9.3 24.8 13.4 7 4.5

5.4 20.9 11.7 5.2 4.5
1972
13.5 25.2 3.2 8.0 4.0
1973
8.3 31.8 24.3 6.1 4.1
1974
7.1 28.6 25.3 3.3 4.1
1975
12.9 26.5 15.3 17.5 3.9
1976
10.1 28.3 10.1 19.9 3.8
1977
9.7 32.5 14.4 18.0 3.2
1978
7.6 35.8 18.3 8.4 3.8
1979
-2.2 31.9 28.7 4.1 5.2
1980
6.7 29.9 21.3 0.5 4.5
1981
7.3 28.9 7.3 7.9 4.4
1982
11.8 29.4 3.4 7.4 4.1
1983
9.4 30.6 2.3 6.3 3.8
1984
6.9 30.3 2.5 5.6 4.0
1985
12.4 29.2 2.6 5.4 3.8
1986
12.0 30.0 3.0 7.1 3.1
1987
11.5 31.1 7.1 8.4 2.5
1988
6.2 33.8 5.7 15.4 2.6
1989
9.2 37.1 8.6 10.2 2.4
1990
9.1 39.1 9.3 6.9 2.3
1991
5.1 36.8 6.2 8.9 2.4
1992
5.8 35.2 4.8 5.8 2.8
1993
8.4 36.2 6.2 8.7 2.4
1994
8.7 37.4 4.5 5.2 2.0
1995
6.9 38.8 5.0 6.9 2.0
1996
5.5 35.3 6.6 2.4 2.6
1997
Source: Mini stry of Labou r, Yearbook of Labour Statistics, annual; N ational St atistical Office , Social Indicators in Korea, annual.
Two points are worth mentioning.

First, business made huge investments in information and advanced technology during the Kim
government (1993-1997) as reflected in the high investment rate during this period. This indicates
that business chose investment as the best strategy for crisis management. But, unfortunately, most
investment was procured from foreign loans and government could not control the conditions of such
loans. The annual repayments caused a sudden drain of foreign currency holdings in the second half
of 1997 and, eventually IMF intervention in December 1997.
Second, unions distrusted attempts by government and employers to weaken worker demands for
new labour laws by stressing the economic crisis. Although there were signs of a downtur n in the
economic indices, unions contended that this was by no means a “crisis”. In addition, the national
economy made a sudden recovery in 1994/1995 mainly owing to the short-lived boom in
semiconductors. Most conglomerates reported higher profits in these two years. Firms seemed
prosperous and money flowed everywhere. In this atmosphere, union distrust of government and
business deepened. No one recognized, however, that the national economy would soon be in real
trouble.
W ages and employm ent

It is worth studying the effect of the wage explosion in connection with the decline in political
activism among labour unions. In spite of the rapid decline in international competitiveness and
firms’ inability to pay, wages have risen steadily at a pace well above productivity rates since 1987.
Moreover, working conditions have gra dually improved, with a shorter working day and better fringe
benefits including children’s education and housing allowances. Improved working conditions, the
valuable fruit of the great struggle, promote worker compliance and commitment to firms, bringing
employees back from street rallies into the workplace. As usual, the unlimited labour supply in the
private sector weakens workers’ bargaining power so that unskilled workers are prone to political
activism. But better working conditions and a labour shor tage in the new sectors of industry caused
worker interest to shift from political unionism to economic unionism. Intensified competition in
domestic markets as a consequence of economic liberalization and globalization favours compromise
between employers and workers in their common fear of bankruptcy and unemployment in the midst
of economic recession. This explains the change in labour orientation from the political to the
economic and pragmatic.
5. Unions and the politics of crisis management:

Labour reform and conflict
IM F regulation
In 1998, the Republic of Korea introduced an IMF austerity policy. The Kim Dae Jung government
had no other option but to accept the terms of the IMF intervention, whose main goal was economic
stabilization. The direction of the reform policies was imposed before Kim’s government was
inaugurated. However, implementing the policies and resolving conflicts of interest depended on the
political capa city of the new regime. It is not surprising to find more congruencies than divergencies
between IMF recommendations and Kim's reform which had been presented to the public during the
Presidential election. But it r emained uncertain how far the IMF package was consistent with and
supportive of Kim's political platform, described as a "democratic market economy". This is a broad
and abstract concept that fits different types of libera l and capitalist economies, in contrast to the
German concept of a "social market economy" which is closer to welfare capitalism. There was no
disagreement with Kim's strategy of strengthening the market function in the national economy
through a series of deregulation and privatization policies, but how far, in what ways, and in which
direction, caused heated debate and conflict between government, employers and workers.
This explains the delayed reform of conglomerates and financial institutions, which is the key
to economic recovery. The "democratic market economy" has three elements that distinguish Kim's
government from previous regimes: a better balance between large and medium-sized firms in the
national economy, more equity, and more reliance on the market. President Kim Dae Jung is well-
aware of the inefficiency and negative effects of state-led capitalism and rapid growth with heavy
reliance on conglomerates. But the crisis management policies prepared and implemented by the Kim
government included remedies that were challenged by business and the upper class. The government
planned to break up the conglomerates into smaller and more manageable units, but employers
argued that restructuring these "chaebols" would ruin national competitiveness. The business
community and sha reholders were alarmed by the policy emphasis on more equity since this was
conceived as income transfer from the upper class to the workers. In addition, people asked how the
government could improve welfare under an austerity policy. Some critics stressed that more reliance
on the market could be detrimental to social justice, as was the case in the United States.
Kim's government imposed a variety of reforms on the conglomerates. These included reducing
the firm's debt ratio to 200 per cent, increasing transparency in all transactions, and selling
unproductive and inefficient firms to foreign investors. Government empowered the Bank
Surveillance Office to terminate financial transactions and recall bank loans if chaebol firms could
not satisfy these conditions. As the IMF package emphasized deregulation and structural adjustment,
Kim's government put more emphasis on the market economy than on democratic issues such as
equity and welfare. In the economic crisis efficiency took pr iority over social justice. This provoked
discontent among wage earners in the lower and middle classes who had voted for him in the
Presidential election. Employers and sha reholders also expressed strong doubts about some aspects
of the economic reform, contending that selling out stra tegic firms would lead to the breakdown of
industrial competitiveness in world markets. Crisis management meant implementing unattr active
and unpopular policies, but without economic recovery conflicts of interest between different social
groups would constrain the capacity of the ruling party.
Kim's pow er base and the first Social Compact
Kim Dae Jung's election victory did not lie in convincing voters of his pa rty's ca pacity but in the
sudden breakdown of the national economy. Voters' confidence in the ruling party collapsed with the
foreign debt crisis that occurred a month before the Presidential election. President Kim's power base
is much weaker than that of the previous regime in several respects.
Even though the ruling pa rty is supported by workers, the middle classes and intellectuals, its
power to force the conglomerates to restructure is very limited. The austerity policy is likely to raise
popular discontent against the Kim government. With inflation above 10 per cent, a large pr oportion
of Koreans are suffering from wage cuts and drastic increases in interest rates. Mass unemployment
has hit consumption and deepened the recession. The longer the austerity policy continues, the more
discontented the population becomes.
President Kim decided to construct a consensus-building mechanism, i.e. a tripartite committee
of government, employer s and workers. In January 1998, shor tly after his election victory, he
announced the creation of a tripartite committee responsible for negotiating pending issues and
setting reform agendas. After three weeks of heated debate, the committee reached a compromise on
ten areas of reform, which specify 90 items regarding the social protection of workers, economic
restructuring, economic policies, industrial relations and labour laws. They include the structural
reform of conglomerates, economic stabilization, legalization of lay-off, government protection of
the unemployed, improvement of social security and the construction of a social safety-net. This is
the first Social Compact since the liberation. It contains agreements on various issues as follows:
(i) Government and employers will construct nation-wide organizations and prepare a policy
package to combat unemployment;
(ii) All parties represented on the tripartite committee will help improve job security by
introducing work-sharing.
(iii) All parties will strive to minimize lay-offs and to support firms in financial trouble.
(iv) All parties will do their best to eliminate unfair labour practices and establish monitoring.
(v) The policy-making process will be open to labour unions. Unions will participate in making
and implementing important policies affecting wage-earners' standard of living.
(vi) All parties have rights and duties in restructuring conglomerates.
(vii) The reform of public enterprises will reflect labour-manager agreements.
(viii) The teachers' union will receive official recognition.
(ix) All parties will strive to improve worker participation in management.
(x) Labour laws will promote industrial democra cy.
The items listed above indicate that government and employers accepted worker demands for
participation in policy making in favour of industrial democracy. The agreement helped to placate
angry workers and labour unions that blamed government and employers for the foreign debt crisis.
Without this agreement wor ker discontent could have exploded into massive turmoil and labour
unrest just after the IMF intervention and the serious economic recession of 1998. In this respect,
Kim's government succeeded in including organized workers in the politics of crisis management and
persuading them to support the restrictive economic policy imposed by the "Technical Agreement"
with IMF. However, the success of the first phase of crisis management did not last long befor e the
government was confronted with a serious dilemma in that it was unable to implement the Agreement
fully. The government could not pacify employers who insisted that massive lay-offs were essential
in a period of austerity. Unions contended that employers were betraying the spirit of the Social
Compact. A tremendous number of firms collapsed during the first half of 1998. Government
ordered 15 financing companies to shut down as well as two conglomerates. As unemployment
soared with the passage of time, unions began to demand job security in accordance with the
Agreement. Workers at Hyundai Motor Company, the largest automobile firm in the country, went
on strike in protest against a management decision to lay off a large number of regular workers and
reduce production lines and facilities. The struggle was not violent as in the authoritarian past, but
continued for almost two months with KCTU support. KCTU leader Kap-Young Lee mobilized
120,000 workers from 16 major cities in the struggle against the lay-off policy and job instability.
In spite of government efforts to act in the spirit of the Social Compa ct, the economic crisis and
soaring unemployment undermined the tripartite committee. T here was a lack of trust between the
three parties and increasing discontent among the rank-and-file.
The limits of tripartite negotiat ion
The compromise satisfied the conditions of the "Technical Agreement" signed by the previous
government. The Social Compact provided President Kim with a firm foundation on which to base
the rigorous reform policies. During the first half of 1998 he frequently reminded the public of the
spirit of compromise whenever the media accused the government of delaying the necessary reforms.
At first he succeeded in gaining working-class confidence and meeting challenges from business and
shareholders. But KCTU threatened to withdraw from the tripartite committee unless the other
members accepted the employment security laws. Finally, the Confederation pulled out in February
1999, claiming that the committee had no power to implement any agreement that it reached. FKTU,
another labour member of the committee, also threatened to withdraw unless its demands were
satisfied. These demands corresponded closely with the points that caused KCTU to withdraw: they
included six importa nt questions that had remained unresolved since the labour code was amended.
The unions wanted to stop employer-led lay-offs and to ensure labour-manager consensus prior to
dismissal. They also wanted to introduce an Employment Security Act, to prepare complete
unemployment protection, and to improve worker participation in management. They wanted to
introduce work-sharing programmes without wage cuts, and finally, to ensure full implementation
of the tripar tite agreement and recognition of the legal and political status of the tripartite committee.
In other words, the second tripartite committee achieved no more than the first committee. In fact
the first agreement, containing 90 items of reform, exceeded the political capacity of Kim's regime
and, to make matters worse, the relative success of the first Social Compact turned out to be a
tremendous political burden. Trade unions began to organize a general strike just after they withdrew
from the committee in the spring of 1999.
There are several reasons for the very limited success of tripartite negotiation in the Republic of
Korea. First of all, although it takes the form of a tripartite agreement, any compromise is in fact
an élitist agreement between leaders at national level. Participation in making policy and monitoring
its implementation is requir ed for tripa rtism to be effective. An organizational and administrative
infrastructure is needed to put any tripartite agreement into effect. However, there ar e no
organizational and administrative bodies at regional and local level through which employers and
workers can collabo rate in implementing policies. It is true that the Social Compact as a national
consensus helps to calm unrest and reduce social costs; it also str engthens the political platform on
which the ruling party has based its reform policies. However, it is an élitist committee without
official networks through which business and labour can work together to produce results at local
level; it is therefore extremely fragile. When KCTU threatened to strike just after it withdrew,
employers found that the committee was not an effective channel of communication. As the economic
crisis continued deeper and longer than expected, serious doubts arose about the role of the tripartite
committee and its political significance. The broa d and vague political slogan "democra tic market
economy" could not persuade the partners to be faithful to the spirit of compromise. Of the many
doubts and questions raised, three ar e worth mentioning her e.
First, to what extent should conglomerates implement downsizing and was the restructuring
imposed by IMF and government truly necessary for economic recovery? President Kim seemed to
emphasize the role of small- and medium-sized firms in the national economy but that did not have
to mean the entire break-up of chaebols into independent firms. It meant that economic concentration
should be reduced so that conglomerates would have less influence on politics and society. But, how
far, in what degree, and in which direction remained uncertain. It is still questionable whether
downsizing chaebol firms to fulfill government guidelines ensures competitiveness in world markets.
Second, the legalization of lay-off promotes labour market flexibility whereas long-ter m
employment increases labour costs. However, mass lay-offs reduce organizational adaptability to
new technology and rapidly changing business environments. Since the mid-1980s some Japanese
firms have adopted American-style employment systems in response to the rapid decline in
international competitiveness. But will American-style flexibility result in productivity improvement
in the Republic of Korea, where firm-centred employment is a long tradition, and to be dismissed
means "social death", as there is practically no chance of re-entry into larger firms which prefer to
recruit young workers without job experience? Firm-centred employment maximizes functional
flexibility as employees acquire multiple skills by rotating through many tasks. Does the replacement
of functional flexibility with flexibility in the size of the workfroce guarantee a rapid recovery from
economic recession and high productivity growth, as neo-liber al mar ket theorists claim? No clear
answer has emerged as yet.
Finally, will the austerity policy be conducive to economic recovery in spite of the dra stic decline
in domestic consumption as a result of wage cuts, tax increases and soaring inflation? Wage earners
are very doubtful about the gover nment policy of "hardship-sharing" manifest in the sudden
reduction of annual income by almost 30 per cent. It is now believed that the debt crisis wa s caused
by an inflow of tremendous foreign loans to conglomerates and undisciplined investment in
production facilities. If we admit that large firms a nd financial institutions are primarily responsible
for the foreign debt crisis, does it help the situation to make them bankrupt? What compensates for
numerous medium-sized firms, financially solid and prosperous in the product market, if they are
in danger of bankruptcy because of the frozen money market? If we accept that there is no other
option except to endure economic hardship, wha t can console frustrated and distressed wage earners?
All these questions await a clear answer. The "democratic market economy" is not so clearly thought
out as to persuade wage earners to sit and wait until living conditions get better. Moreover,
misgivings are growing, since government policy packages have frequently revealed inconsistencies
and contradictions.
Unemployment as a bottleneck
Unemployment is a situation that wage ear ners cannot tolerate over a long period. Whereas inflation
is the most urgent issue for business, wage earners are mostly concerned about unemployment. The
National Statistics Office announced that the number of unemployed had almost tripled in the year
after the IMF intervention, reaching 1,850,000 at the end of 1998. The unemployment rate soared
from 3.1 per cent in December 1997 to 4.5 per cent in January, 5.9 per cent in February, and 6.5
per cent in March 1998. When underemployment was included, i.e. 17 hours or less in a week, the
rate was over 10 per cent, the highest for 40 years. Statistics for 1961-1998 show that the GDP
growth rate fluctuated between 5 and 15 per cent except for a sharp drop to -5 per cent in 1981.
Inflation was also unstable during the 1960s and 1970s, culminating at 29 per cent in 1979, the year
when the Yushin regime collapsed with the assassination of President Park. Since then, inflation has
been relatively stable throughout the 1980s and 1990s. However, the foreign debt crisis terminated
the stability and inflation went up to 13 per cent within a few months of the IMF intervention.
Inflation is not new to the Republic of Korea, where rapid growth was inevitably accompanied
by moderate rates of inflation. However, high unemployment is entirely new to the Korean people
and the government. As reflected in the overall trend, successful economic growth curbed
unemployment for four decades, the rate remaining below 5 per cent since the early 1970s. Korea
has been praised for achieving almost full employment without a rigorous labour market policy. But
the record has been broken by an 8 per cent unemployment rate that approximates the average for
European countries. Although it may be inevitable, the steep increase in unemployment is
problematic.
More serious is the fact that the government is unprepared for mass unemployment. It is often
contended that the country is least prepared for unemployment and worker protection since
joblessness has been solved by the "growth-first policy". Policy-makers in government were
convinced for decades that speedy growth would cr eate plentiful jobs for skilled and unskilled
workers alike, and that allocating a government budget to unemployment programmes was wasteful.
This explains why the government did not respond to unemployment until the mid-1990s and delayed
the introduction of employment insurance until 1995.5
Unemployment policy differs considerably in advanced capitalist countries, but all governments
make use of three programmes with varied emphases: unemployment benefits, macroeconomic
policies to stimulate the economy, and direct intervention in the labour market. Some governments
choose passive measures, concentrating on unemployment benefit and indirect macroeconomic
policies. Others adopt active labour market policies (ALMP) in a combina tion of job creation, job
replacement and job training. Major research in European countries shows that ALMP can be a
valuable and effective method placing the unemployed in job vacancies, training workers with
obsolete skills for new demand, and creating new jobs. The Republic of Korea lacks this concept.
ALMP does not exist and there is no agency responsible for coordina ting and managing complicated
labour administration, such as the Swedish AMS and the German Bundesanstalt.
President Kim has attempted to expand government intervention in order to keep the Social
Compact, allocating a very large special budget to this policy area. The unemployment budget for
1998 amounted to US$11 billion, one-third of which was reserved for unemployment benefits and
living allowances; a small portion was for job creation, job replacement and job training. The sums
allocated represented about 13 per cent of the government budget for 1998. The allocation was
increased to US$16 billion in 1999. As far as the size of the budget is concerned, the government
effort was remarkable. The reverse side of the policy was to alleviate the burden on employers by
permitting the right of lay-off. Policymakers believed that foreign capital would come back once the
right of lay-off was guaranteed, and unemployment would then be resolved naturally. President Kim
repeatedly emphasized that it would not be long until the crisis ended, possibly within one-and-half
years. At the beginning stage of policy implementation, however, the unemployment rate was still
expected to go up as a result of the massive downsizing of chaebol firms that would be completed
in the second half of 1999.
Continuing high unemployment puts tremendous pressure on Kim's regime. It is both a cause and
an effect of the politics of reform. If unemployment continues over a considerable period and other
reform programmes are delayed, it is likely that the government will face a serious political challenge
from its supporters, i.e. wage earners. In addition, the lack of exper ience in labour market
intervention and the loose organiza tion of labour administr ation make labour politics ineffective.
Unemployment is a bottleneck in the politics of refor m. It is fair to say that the success of reform
depends on maximizing the feedback effect, curbing unemployment effectively, introducing active
labour market policies and establishing an administrative infrastructure to carry out the spirit of the
Social Compact.
Improvem ent of human rights
The Republic of Korea is notorious for human rights abuses - civil rights, political rights and worker
rights. For three decades of authoritarian repression, torture, imprisonment and illegal dismissal were
inflicted on political dissidents and social and labour activists. Human rights are the most sensitive
issue for leaders of the labour movement and rank-and-file workers alike, since political oppression
is an obstacle to the improvement of working conditions and workers’ standard of living. It has been
widely recognized that the Republic of Korea is not among the countries with advanced human rights
by international standards. This explains why Amnesty International has always expressed deep
concern at the country’s record, especially with regard to the labour movement. In this arena the
violation of human right occurs frequently and apparently through both formal and informal
methods. However, President Kim Dae Jung promised to improve human rights and eliminate illegal
and unfair treatment of political dissidents and labour activists in his inauguration speech. The
recognition of human rights has been improved under the present government. In this regar d,
President Kim deserves praise for taking some positive steps.
In June 1998 when President Kim visited the United States he announced a political schedule for
the establishment of a National Human Rights Committee to monitor and indict illegal and violent
actions on the part of ruling groups including bureaucrats, the police and employers. His promise
was fulfilled in March 1999 when a law was passed creating the National Human Rights
Committee. The committee is a politically neutral and financially independent organ in charge of all
official tasks concerning the violation of human rights. It is too early to say how much it will
contribute to improving human rights and to eliminating brutality and violence at workplaces.
However, the establishment of the Committee is a sign of progress. Before the law was passed the
government released most of the labour activists who were in prison, in celebr ation of March 1st.
Over 400 activists were imprisoned in 1998 but many were released in 1999. There are still many
laws that hold back the progress of human rights; these are the focus of discussions on legal refor m.
In spite of the improvement, there are still many human rights abuses in the labour movement
and employment relations. Such cases increased dramatically with the deepening of economic
recession and mass dismissals during the foreign debt crisis. Unemployment hit disadvantaged
groups disproportionately, so that women, unskilled workers and casual labourers were the first to
lose their jobs. Although legislation to prevent discrimination against women at work was introduced
by the previous government, young women workers were the first to be dismissed since people did
not think of them as the family bread-winner. This was accepted without resistance in the
unprecedented economic crisis, but the process hid many cases of abuse. Male workers threatened
with dismissal were no exception. Most employees were forced to accept sizeable wage cuts in the
face of economic disaster. Otherwise their firm would close down because of bankruptcy and
restrictive government policy.
Democratiza tion has promoted concern for human rights since the early 1990s. Leaders of social
movements criticized government for using riot police to break industrial strikes and for banning
collective action and street rallies. Violation of rights falls into four categories.
First is unfair labour practice. Before democratization, unfair labour practice occurred in most
workplaces, regar dless of firm size. Physical punishment was not uncommon. Employers enforced
overtime and if employees refused to work more than their regular hours they could be dismissed
without notice.
Second is the imprisonment of unionists who organize protests and strikes. Industrial disputes
tended to result in damage to all parties: wounded police officers, arrested workers and broken
production facilities. The government used riot police to suppress worker protest, while employers
hired guards to protect their production facilities. Even when workers declared a peaceful protest,
riot police were deployed in front of the factory. Unionists who organized protests and respected all
the procedures stipulated in the Labour Union Laws and the Laws on Arbitration of Industrial
Disputes were also subject to arrest on charge of “obstructing business”. In1998, when KCTU called
a general strike against the restructuring policy that generated and legalized massive lay-offs, many
strike leaders were imprisoned. The story of Mando machinery indicates how strikes were destroyed
by the riot police and the NSL(National Security Law). The Mando strikers were attacked by 10,000
riot police and dozens of workers were arrested and beaten by armed policemen. The strikes
occurring in the years just before and after IMF intervention yielded a long list of arrests (Amnesty
International, 1999). Most were important union figures, including the Secretary-General of KCTU
and the President of the Korean Federation of Public Sector Unions. The number of arrests
fluctuated over time, culminating with 611 detentions in 1989. It then declined gradually but began
to show a steep increase with the amendment of labour laws in1996 and the economic crisis of 1998.
Table 4 shows the number of workers imprisoned from 1987 to 1995 and the charges made against
them.
Table 4. Number of workers in prison by charge, 1987-1995
C a u s e o f i m p r i so n m e n t No. of cases
Obstruction of business 1433

Use of violence 892
Violation of Arbitration Law 513
Violation of association and demonstration 377
Obstruction of government administration 185
Violation of p rohib ition on third party int ervention 163
Violation of NSL 144
Forfeit of official document 64
Violation of Labour Union Law 54
Illegal intr usion 50
Use of explosives 48
Source: Korean Confederation of Trade Unions, 1996.
Third, illegal dismissal caused concern during the economic crisis of 1998. As mentioned earlier,
the number of unemployed increased dramatically from 500,000 in 1997 to 1,850,000 in 1998. It
is difficult to calculate how many people were dismissed illegally and how many were allowed to
petition their employer. Workers dismissed during this period rarely had an opportunity to appeal
because of the economic crisis and firms’ desperate battle for survival. Unemployment statistics
indicate that the massive lay-offs mainly affected disadvantaged groups in the labour market, who
lacked skills, experience and education.
Fourth, discrimination on the basis of gender or physical defect is a serious problem. The
Republic of Korea is one of the countries that offer lower wages and fewer opportunities of
promotion to women and disabled workers. During the last two decades the average wage for women
was 60-70 per cent that of men, and disabled people could not find jobs in the formal sector.
Ironically, however, female workers were over-represented in export manufacturing in those years.
Employers with labour-intensive factories liked to hire young female workers to operate assembly
lines in order to reduce labour costs and to accelerate labour turnover. Moreover, female workers
could not appeal to courts or resist employer decisions on termination of employment. This explains
why female workers constituted the main force of the labour protest in the 1970s. But this climate
has changed rapidly since the labour dispute of 1987.
The Kim Dae Jung government introduced legislation to outlaw gender discrimination in
employment and promotion in 1998. The law stipulates equality of job opportunity and promotion
in internal labour markets between men and women, with sanctions against employers who do not
respect the law. Government also encourages the recruitment of disabled workers by pr oviding wage
support to employers who offer them jobs and training. Despite these efforts, feminist groups and
social organizations claim that female workers were the main group to be sacrificed in the massive
lay-offs of 1998. This claim is supported by statistics that show a sharp decline in the number of
young, female, and unskilled workers compared to other demographic groups.
There are many legal and institutional constraints that undermine trade union activities and
workers’ rights to organize, negotiate and express opinion. Trade unionists began to request
international organizations to exert pressure on the government. Such organizations have sent
inspectors and observers quite frequently since the labour dispute of 1987. Their reports to the
Government of the Republic of Korea contain a common recommendation that labour laws and other
legislation should be reformed in the light of ILO Conventions. The ILO examined two complaints
from Korean trade unions and sent an official letter to the government in November 1998 (Amnesty
International, op. cit.). It reads: “The Committee must express its deep concern over the fact that
trade union leaders and members are still detained or on trial, it would appear, for activities linked
to collective labour disputes. The Committee is convinced that it will not be possible for a stable
industrial relations system to function harmoniously in the country as long as tra de unionists are the
subject of detentions and judicial proceedings.” Although the Republic of Korea beca me a member
of ILO in 1991 and joined OECD in 1996, the government has still not ratified ILO Convention No.
87 on freedom of association or Convention No. 98 on workers’ right to organize and to bargain
collectively.
6. Politics in unions: Leadership and recent issues
Recent issues
In the midst of the economic crisis of 1998, workers at the Hyundai Motor Company went on strike
to demand the unconditional repeal of the company’s la y-off policy, claiming that it violated the
spirit of the Social Compact which required that efforts be made to avoid lay-off prior to the final
decision. Since the Hyundai Motor Company, the number one auto manufacturer in the country, was
a major contributor to exports, government observed the strike carefully and studied its effect on
unions in other sectors. The strike continued for two full months from June to July with no
intervention from outside, e.g. shutdown of factories or attack by riot police. Government tried to
conciliate angry workers who were protesting against the mass lay-offs which were decla red
unilaterally without negotiation with company unions. Workers claimed that the dismissal of 10,000
workers within a few months was illegal and immoral. After two months the strike was resolved
peacefully withgovernment mediation. Government successfully persuaded the employer to minimize
the lay-offs and also persuaded the union to accept the employer’s promise of maximum severance
pay for dismissed workers. Government also accepted the union request that strike leaders should
not be punished or arrested and that the employer should not indict the union for lost production.
This outcome gives the impression that the union won the strike and strengthened its power to
negotiate with the state and employers. But the opposite is true. T he union lost the game and lost its
power to negotiate in the midst of unprecedented economic recession caused by the austerity policy.
The union of the Hyundai Motor Company is one of the strongest and most militant in the Republic
of Korea. The fact that Hyundai workers finally accepted the government recommendation and the
employer’s lay-off schedule had a tremendous impact on the unions in FKTU and KCT U. Lay-off
was accepted. After this event workers main attention turned from aggressive attitudes to defensive
and pragmatic issues such as compensation and severance pay. Industrial disputes rarely occur red
in the latter half of 1998 and compensation became the most important issue in dismissal.
In 1998, the government undertook four important tasks under IMF surveillance: legaliza tion of
lay-off for labour market flexibility; privatization; reform of financial institutions; rationalization
of chaebol firms (conglomerates). All these programmes had a negative impact on unions in terms
of job insecurity, declining membership, a nd especially loss of the leading unions in KCTU, i.e.
unionized public enterprises. FKTU and KCTU collabourated in the struggle against government
policy, KCTU being more active and aggressive than FKTU. KCTU elaborated counter-agendas:
job sharing against lay-off, opposition to pr ivatizing public enterprises and introduction of
Employment Security Laws. FKTU expressed support for this platform.They developed six agendas
in opposition to the second tripartite committee, claiming that the committee functioned only to
induce workers to agree to government and employer demands. The six agendas are still the most
important pending issues for government, employers and workers. Union claims include the
following: refusal of employer-led lay-off and introduction of labour-management negotiation pr ior
to dismissal; introduction of the Employment Security Act; complete protection for the unemployed;
legalization of worker par ticipation in management; introduction of work shar ing without wage-cuts;
reconstruction of the tripartite committee as a legal and political institution.
Government refused to accept these demands, mainly because of their negative impact on
economic recovery and national competitiveness. President Kim Dae Jung repeatedly emphasizes the
trend towards flexible production systems and unrestrained competition between firms, regardless
of nationality. He has pursued neo-liberal policies similar to those of President Reagan and Mrs.
Thatcher, stressing that the economy can adapt to world standards by promoting the “market”, which
was seriously distorted by authoritarian state intervention. In accor dance with this firm belief in the
market economy, priority has been laid on fairness fair competition without state intervention, fair
transactions between firms, and fair process without violation of “fair trade laws”. Fairness is
acceptable to most actors, but “which fairness”? raises more debate regarding the neutrality of laws
and politics. The government spent US$100 billion on rationalizing banks and financial institutions
in 1998. The result was successful. But citizens had to pay higher taxes to make up the financial
deficits. Unions ask why wage earners should pay for restructuring. Is massive and unconditional
lay-off inevitable, as the government insists and are there no other alternatives for maintaining job
security and reducing high unemployment? Why are unions excluded from policymaking at both
enterprise and national level, when these policies are decisive for workers’ income and job security?
Is the neo-liberal market ideology helpful to workers and unions, or detrimental to worker welfare?
Unions are gradually losing confidence in President Kim’s policy, which they regard as detrimental
to worker welfare and union activities. The Kim government applies labour laws to industrial
disputes and especially to illegal strikes. Unions repeatedly contend that the labour laws are not
neutral but favour employers. The strike ban in public enterprises is good evidence for the union
contention.
The Kim government takes a more open attitude to unions than before and provides a better
environment for union activities. But, it is not willing to accept the six union agendas. The economic
crisis may be a good excuse. However, it seems that union demands exceed the capacity of the
present regime. The limit was clearly observed in an illegal strike by the Seoul Subway Company,
one of the leading unions under KCTU, in April 1999.
Dif fic ulties of leadership
The reproduction of leadership is the most essential element of the labour movement. If leaders
accept government repression a nd an exploitative labour policy, the labour movement serves the
interests of the ruling class and cannot be democratic. Labour leadership is of two kinds,
corresponding with the national centres. FKTU tends to cooperate with state labour policy regardless
of government characteristics, while KCTU takes an independent position, with the aim of
democratizing industrial relations. FKTU and KCTU both supported Kim Dae Jung in the last
presidential election since he was more sympathetic towards the labour movement than other
candidates. The creation of the tripartite committee is evidence of his sympathy with unions and his
political stance.
In spite of significa nt changes in politics and the union environment, the chief concerns of labour
leaders have remained unchanged under the present regime. If unions call a strike, the leaders may
be the target of police action, and could face legal penalties. When leaders are arrested and
imprisoned on charge of violating labour laws,6 it takes a long time to build new leadership in the
absence of key figures. Usually, it takes two or thr ee years to re-establish authentic lea dership after
those in the forefront of union action ha ve been removed. Two problems bother labour leaders when
they decide to strike against government policy: these are the strong possibility of imprisonment, a nd
the breakdown of allegiance of rank-and-file workers in the face of government intimidation. The
strike of the Seoul Subway Company union illustrates the difficulties fa ced by union leaders. The
same problems apply to other unions at the present time (1999).
First, a strike may destroy leadership, especially when the strike is broken by the government.
On the other hand, a successful strike is likely to strengthen leadership but success cannot really be
expected in circumsta nces where state and employers are not friendly to organized labour. It takes
a long time to reconstruct leadership after the breakdown of union direction. This explains why
labour leaders change so frequently in KCTU compared with FKTU.
Second, a frustrated strike undermines the allegiance of ra nk-and-file workers and reduces
solidarity. Many strikers give up when government announces tha t they will be punished for
violating the labour laws. Weak allegiance is detrimental to unions, and it is extremely difficult for
leaders to encourage workers in the face of government intimidation. When union leaders are
arr ested the rank-and-file have to build up new loyalties. This process generates conflict among
workers, and can even split the union into factions.
Third, strikers face hostile public opinion in the Republic of Korea. The only strike which people
supported was the labour dispute of 1987 that sta rted democratization. T he mass media and leading
newspapers strongly criticized the selfishness of the Subway Union in calling a strike, str essing the
national economic crisis. The headlines of leading newspapers expressed the fury of Seoul citizens
against the strike action which was disrupting their daily transport. Unions need to improve public
opinion about the labour movement, but this is extremely difficult in a country where wage earners
are hostile to radical and militant action on the part of workers. This explains why union leaders
have not won elections even in industrial cities in the past.
Fourth, unions suffer from financial problems, especially at national level. As mentioned earlier,
the system is based on enterprise unions. Workers pay 1-2 per cent of their monthly wage to the
enterprise union, which pays something less than 10 per cent of these dues to the industria l union
and the national centr e. As union dues flow upward, financial problems are naturally worse for the
apex bodies. The Seoul Subway Company union spent most of its funds on the ten-day strike but
it is financially stable compa red to other unions. The larger the company size becomes, the better
the financial situation is. In contrast, the apex body cannot escape financial problems because of its
total reliance on member unions. The Federation of Public Enterpr ise Unions could not provide
financial support for the Subway Union because it did not have the means to do so. The lack of
funds hampers national centres as well as industrial unions in developing policy packages that
require an enormous budget. The bulk of dues from member unions is used to maintain offices and
facilities, and pay salaries. Financial conditions vary between the federations, the older ones having
a more solid base than those established recently. FKTU is better endowed than KCTU because it
receives a government subsidy which amounts to a few million dolla rs a year. While FKTU has other
sources of income from renting out offices and operating small stores, KCTU has to pay rent on its
headquarters office every month.
Financial constraints mean that union leaders cannot develop educational programmes and other
activities that are important to worker solidarity. FKTU is better off in this respect, but other
organizations have to reserve most of their budget for routine activities. A sudden decline in
membership precipita ted by the bankruptcy of numerous firms during the economic crisis has
worsened the poverty of Korean unions. FKTU and KCTU both lost a large proportion of their
members when the organizing rate fell from 15 per cent in 1997 to 11 per cent in 1998.
Manufacturing and finance are badly hit because most bankruptcies occur in these sectors. Financial
problems are analysed more closely below.
Three main factors cause difficulties for labour leaders. According to a survey of 1995, these can
be represented in percentage terms as follows (Yee and Kwon, 1995).
Table 5. Factors that cause difficulties for leadership (%)

Factor size -1 -2 -3 -4 -5 -6 -7 Tot al No.

of cases
Size 1 14.6 7.3 26.0 1.0 7.3 6.3 37.5 100.0 961
Size 2 16.9 5.6 26.8 1.4 9.9 4.2 35.2 100.0 71
Size 3 14.5 11.8 22.7 6.3 9.0 6.3 29.0 100.0 110
Total 15.2 8.7 24.9 3.3 8.7 5.8 33.6 100 1142
Size 1: below 300; size 2: 300 1,000; size 3: over 1,000

(1) Group co nflict and di scord insid e firm
(2) Representatives who oppose the leader
(3) Conscio usness gap betwe en lead er and rank -and-file w orkers
(4) Absence of guidance and ineffective apex body
(5) Union avoidance strategy in the firm
(6) Constraint of unio n laws and governm ent policy
(7) Social apathy and negative public opinion
Table 5 clearly shows that leaders face three main negative factors. These are hostile public
opinion, apathy of rank-and-file workers and conflict within the union. If the survey included
financial problems as factors weakening leadership, these would be ranked high. Public opinion
rapidly turns against union activities these days because of economic hardship, and workers on the
shopfloor are more interested in wages, job security and company welfare than in social and political
issues. The apathy of the rank-and-file becomes greater when leaders concentrate on social and
political issues. Conflict and discord within the union have something to do with the composition of
the workforce and ideological orientation. Conflict within unions reflects the structure of Korean
society which is based on regionalism and the old school tie. But the ideological orientation of
leading groups became more influential in the period of democratization after 1987.
Union finance and expendit ure
It is worth analysing more carefully the extent to which unions suffer from financial constraints and
how they try to overcome this problem. As mentioned earlier, the national centres rely solely on dues
from enterprise unions, which remit about 10 per cent of their revenue to the federation and the
national centre. The federation is considered more important than the national centre with respect
to membership dues. Neither the federation nor the national centre can force enterprise unions to pay.
Many pay no dues at all, while others pay double dues to both FKTU and KCTU.
According to a survey conducted in 1989, average union dues as a percentage of total wage were
0.68 per cent for all industries and 0.82 per cent for manufacturing. This compar es with figures for
the United Kingdom (0.3 per cent), France (0.75 per cent), Italy (0.5 per cent), Germany (1.0 per
cent), United States (1.0 per cent), and Japan (1.1 per cent) (Park and Park, 1989). The proportion
of unions paying federation fees differed by industry. In the metal industry 89 per cent of unions paid
a subscription to the federation in 1989 (11 per cent paid nothing). On average, 10 per cent of
enterprise unions paid no dues to their federation or national centre in that year. The figures have
probably not changed much. It is easy to calculate the revenue of FKT U and KCTU if the number
of member unions is known. In 1989, FKTU’s total revenues amounted to 705 million Won (US$
900,000)and the share of union dues was 66 per cent (Park and Park, 1989).
FKTU expenditure falls into three main categories: maintenance costs and salaries (50 per cent),
routine activities (25 per cent) financial costs and others (25 per cent). Since half the revenue has
to be reserved for offices and staff, only a quarter can be used for activities. The development of new
progr ammes can hardly be expected in these circumstances. This is why FKTU has relied upon state
subsidies in implementing special programmes for members. FKTU has a large building in a
financial district of Seoul, and also a training centre donated by the government after 1987 in a
satellite city of Seoul. KCTU’s yearly revenue is far smaller than that of FKTU because it is newly
established, and its membership is just one-third of FKTU’s. In addition, KCTU is not entitled to
a state subsidy since it is not legally recognized. Financial constraints thus undermine KCTU’s
capacity to develop and implement policies for worker solidarity and social and political reform.
Most enterprise unions also suffer from financial constraints except large ones with over 10,000
workers. There are approximately 100 unions of this size. These are more affluent than the national
centres because of regular income from members. They are able to use funds for outsourcing policy
development and special programmes such as constructing horizontal networks with other unions
and consolidating worker solidarity across industries and firms. In contrast, small- and medium-sized
unions cannot carry out even routine activities because of poverty. During the 1980s these unions
sometimes held special fund-raising campa igns selling shirts and calendars for example. But this is
no longer efficient as public opinion is against union militancy. Meanwhile, KCTU tr ies to improve
its financial position by encouraging affiliated unions to pay their fees and requesting international
NGOs to contribute. But the decline in membership due to the economic recession is undermining
its effort. It will take a while for KCTU to become financially stable.
Exploring new resources for solidarity
As already stated, public opinion is gradually turning against the labour movement, especially in the
present context of economic recession. There are two main reasons for this negative trend: one is a
deep-rooted conservatism and anti-labour ideology peculiar to Korean society, and the other is the
predictable and harmful impact of labour disputes on economic growth. Rapid growth seems natural
to the people, and any factor that slows economic growth is considered harmful. The labour
movement is considered as a “necessary evil” in the process of economic development. Social
support for the labour movement culminated just after the dispute of 1987 and then declined rapidly.
It is ironical that the labour movement was unable to strengthen its social and political position in
the process of democratization although it was largely responsible for the demise of the authoritarian
regime. There is a strong tendency in Korean society to oppose the rise of organized labour in
politics and the economy. Conservative groups viewed the tripartite committee of 1998 with
suspicion and discontent. Thus, it is a matter of urgency for labour leaders to develop new resources
for worker solidarity and cooperation with other socia l movements. Labour leaders think that the
new social movements (NSMs) which are emerging are good resources for solidarity.
Since the early 1990s NSMs have been emerging in the process of democratization. Numerous
organizations and associations are defending public interests, including the feminist movement, the
peace movement, consumers’ rights, and environmental protection. The values of NS Ms correspond
with the concerns of workers. The human rights movement and environmental protection are good
examples in this respect. The feminist movement is interested in working conditions for women in
factories such as lower wages, discr imination in promotion and employment, and sexual harassment.
FKTU and KCTU have identified important social issues shared with NSMs and held a joint
conference and joint campaign with such organizations in recent years. This marks significant
progress towards a new solidarity. Some enterprise unions have already begun to be involved in
regional issues such as anti-development campaigns, ecological protection and human rights.
Two factors accelerate the new solidarity between unions and NSMs. One is the expansion of
common interests in the process of democratization. As unions become more active in social and
political reform, NSMs invite union leaders to workshops and conferences on regional issues more
frequently than before. Unions and NSMs are developing networks for information exchange and
cooperative action. Second, a survey reports that many NSM activists are recruited from the labour
movement as public concern has moved to post-industrial values since the early 1990s (Song, 1998).
For instance, activists who were union leaders in female-dominated factories in the past are now
playing a leading role in the feminist movement. Such activists are also found in the welfare
movement, consumers’ rights groups and the human rights campaign. They have deep sympathy with
workers and develop close ties with union leaders. Labour leaders make use of formal and informal
networks in expanding links with NSMs (Kim and Song, 1997).
How far this effort will be successful and what sort of solidarity will be achieved are s till
uncertain. It is desirable for unions to develop solidarity with social organizations, but common
agendas such as peace, environmental pr otection and human rights may undermine the cause and
purpose of a labour movement based on class. Nevertheless, solidarity with NSMs is pursued as a
desirable way for unions to escape from the conservative social atmosphere that is hostile to the
labour movement.
7. Conclusion: Future tasks

This paper has looked at the way in which structural changes resulting from democratization and
globalization have affected Korean labour unions and how the unions have responded. To conclude,
it is useful to summarize the achievements of trade unions and to look at future tasks.
The union movement in the Republic of Korea is considered to predict the future of organized
labour in Asia. It is not inappropriate to state that the Korean movement is the most influential in
the continent influential in volume, impact of strike action and power to mobilize workers in the
struggle against aut horitaria n labour practice. It is influential not in the exercise of legal and
institutional power but in the struggle to gain such power. The movement is extremely fluid in
pursuit of its goal. This strength and fluidity attracts much attention from organized labour in
countries such as Thailand and Malaysia. Several points are worth mentioning in this regard.
First, the Korean union movement is fairly healthy and not cor rupt in comparison with some
Latin American countries where official unions were under state control for a long period. It is not
so imbued with “give-and-take politics” even in the case of the Federa tion of Korean Trade
Unions(FKTU), the only apex body which had official recognition before the 1988 amendment of
labour laws. Thanks to its clean image the movement grew fast and gained more support from the
middle and lower classes in the 1990s.
Second, the labour movement played the most influential and decisive role in the struggle against
authoritarianism in the past two decades and in triggering the transition to democracy in 1987.
Organized labour put formidable pressure on authoritarian leadership in all three major regimes
when NSMs were underdeveloped. It also made ordinary people aware of the importance of social
justice and political freedom. Although progr essive groups of organized labour were accused of
extremism in the 1980s, democratization would not have been promoted without the unions’
contribution.
Third, unions have achieved an outstanding record of development, despite repressive practices
and legal restrictions, formal and informal barriers to organizing workers: most large firms are
unionized except the Samsung conglomerate. T he organizing rate still remains low but the fact that
large firms are mostly unionized and that major factories carry out cooperative labour/management
actions explains the union impact on politics and the economy. Large unions in big firms enjoy a
financial surplus due to labour legislation that permits company unions to collect dues from member
workers. In large unions, financial affluence hides a danger of corruption as reflected in frequent
quarrels within unions.
Fourth and most important, attempts to overcome the limits of enterpr ise unionism cannot go
unmentioned. Before the labour law amendment of 1996, industria l unions were marginalized by the
legal ban on third party intervention in enterprise labour disputes and collective bargaining. Thus,
the legal recognition of industrial unions was an important aim of the labour movement. It was
finally achieved in the labour law amendment of 1998.
The Republic of Korea is a contested terrain between the European model and the Japanese
model, i.e. industrial unionism and enterprise unionism. While the European model is more common
in textiles, finance and services, the Japanese model dominates big manufacturing firms. This
situation is a source of optimism for other Asian labour movements which, they feel, are limited by
enterprise unionism combined with foreign capital.
Future tasks can be divided into three types: organizational, political, and economic. First is the
question of organizing the tr ade union movement. It took almost ten years to construct an umbrella
organization competing with FKTU and to obtain legal recognition. The attempt was frustrated
several times but succeeded eventua lly. For the first time in Korean labour histor y worker
representation was split between FKTU, KCTU, and KCIIF (independent unions). There were
unbridgeable differences in policy orientation, political attitudes and goals between the three apex
bodies: there are more differences than similarities between them. The country has thus entered an
era of multiple unionism.
Building up strong industrial unionism was another task vigorously pursued by some unions and
this was finally achieved in the new labour laws of February 1998. But big unions with 10,000 or
more members are reluctant to be controlled by a national federation. T he umbrella organizations
are not yet able to support newly organizing unions and expand organizational boundaries by careful
policies. Due to the weakness of national centres and industr ial federations, the horizontal and
vertical alliances that are the key to the growth of unionism are not yet fully developed. Therefore,
the organizational task is to build strong alliances between unions.
Second is the political task. Organized labour played a crucial role in the transition to democracy
in the Republic of Korea. But it failed to expand its organiza tional scope and political space.
Unionization rates increased sharply for a few years after 1987 but bega n to drop from the mid-
1990s, finally reaching the lowest level in the past three decades. In addition, organized labour was
entirely excluded from the reform politics of Kim Young Sam’s government. President Kim did not
change the principle of labour politics but stressed a closer adherence to labour laws. Unions had
no place in the politica l arena and no opportunity to exert pressure on policymakers. The party-
labour link does not exist in Korean politics. In such an environment, union efforts to establish a
political party ca nnot be fruitful. The development of party-la bour links is necessary if unions are
to gain some political influence. But the precise nature of these links is still open to debate.
The final task is economic. In advanced capitalist countries, unions are regarded as an important
partner in improving productivity and competitiveness in world markets. Workers expect their union
to ensure that they have good wages and working conditions. These two functions are usually
contradictory and hard to satisfy simultaneously since high wages undermine firm competitiveness,
especially in a country tha t has relied largely on cheap labour for comparative advantage in world
markets. The Kor ean economy had long enjoyed benefits from a protectionist policy and was not
prepared for globalization, free trade and world markets. But industrial restructuring for the global
economy was not so ur gent for unions, most of which were newly established and more concerned
with raising wages and improving working conditions. Employers had to forego profits and sell their
assets to pay increased wages and benefits in the early 1990s. Employers believed that a “cost-
pushing strategy” could placate angry workers and gain their commitment to the company.
Employers made strenuous efforts to meet the new pressures from inside and outside by a managerial
revolution that included downsizing, new pay schemes and employment systems. In this sense, the
decade after 1987 was a period of industrial restructuring and re-engineering in terms of
technological upgrading and managerial innovation. However, these efforts were not supported by
unions because of distrust and animosity against employers. Distrust became stronger in the course
of dispute settlements in the early 1990s. The amendment of labour laws in 1996 provoked another
conflict between business and labour, instead of resolving tensions. Employers a nd unions both failed
to improve flexibility in employment and production despite the fact that flexibility was essential to
cope with the global economy.
The IMF intervention of December 1997 altered the entire atmosphere of conflict between
employers and unions, as the government was obliged to implement new policies including labour
reforms. The employment system has been significantly changed so as to reduce job security as well
as life-long employment. As lay-offs became legal in February 1998, numerous workers lost their
jobs. Unions realized that they were no longer on the offensive; they became passive and defensive
in the midst of economic crisis and increasing unemployment. Unions are alert to the high rate of
unemployment which, they know, encroaches on their organizational base and weakens their power
to negotiate. Now it is desirable for unions to be more policy-oriented than strike-oriented in the
deepening economic crisis.
The 1970s and 1980s were the era of struggle for political fr eedom and worker rights; the decade
after the political opening of 1987 was the era of attempts to cultivate a mature partnership between
politics and the economy. During the last ten years, unions have weathered democratization and
globalization simultaneously. They have realized that to maintain worker unity across enterprise
unions is not easy in a democratizing and globalizing economy due to the diverse interests of workers
and intense market competitionamong firms. Although it will take time for unions to overcome these
challenges, past exper ience indicates that they will grow into strong and healthy organizations in the
Republic of Korea.
Notes
1
Opposition union leaders first established KCTU on the basis of NCTU in 1992, and they expanded the coaliti on
by mobilizing progressive unions later in 1995. A new KCTU was born in 1995.
2
The new labour laws of 1996 permitted multiple unionism after three years, i.e., in 1999.
3
If the price of housing and land is considered, CPI would increase well above 10 per cent.
4
When inflation is added, the nominal wage ranges by 10-20 per cent in these years.
5
It is called employment insurance instead of unemployment insurance.
6
If unions respect the procedures stipulated in the labour laws, strike leaders are commonly punished on political
grounds.
Acronyms
FKTU: Federation of Korean Trade Unions
KCIIF: Korean Congre ss of Inde pende nt Industri al Trade Un ion Federation
KCTU: Korean Council of Trade Union Representatives (1993-1995)
KCTU: Korean Confedera tion of Trade Uni ons (1995-)
KTUC: Korea Trade Union Congress
LMCC: Labour-Management Cooperative Council
NCRITU: National Council of Regional and Industrial Trade Unions

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Discussion pap ers

Labour unions in the

International Institute for Labour Studies Geneva

First published 1999

1. Introduct ion: Unions in transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. Labour politics and the structure of unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3. Trade unions in the transition to democracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

4. Challenges to unions: Economic liberalization and globalization . . . . . . . . . . . . . . . . . . . 16

6. Politics in unions: Leadership and recent issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

7. Conclusion: Future tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

2. Labour politics and the structure of unions

The grow th and st ructure of unions

Table 1 . Grow th of unions

Year Industrial Local unions No. of Organizing rate

1963 16 2150 224420 20.8 18.5 20.3

Collect ive bargaining

3. Trade unions in the transition to democracy

Democratization in the Republic of Korea

The rise of dem ocratic unionism

Unions in a reform democracy, 1 9 9 3 -1 9 9 6

The two characteristics of the contemporary white-collar movement in Korea - the

Table 2. Some features of f ederat ions of occupational unions

Name Date of No. of Me mb ership

Council of Researchers’ Professionals’ 32339 38 12000

4. Challenges to unions: Economic liberalizat ion

The impa ct of globalization

Union struggle and labour orientation

The economy , w ages and employm ent

Table 3. The economy, w ages and unemployment: Increase rate (%)

Year GNP Investment CPI R e al w a g e Unemployment

1971 9.3 24.8 13.4 7 4.5

Two points are worth mentioning.

W ages and employm ent

5. Unions and the politics of crisis management:

Kim's pow er base and the first Social Compact

The limits of tripartite negotiat ion

Improvem ent of human rights

Table 4. Number of workers in prison by charge, 1987-1995

Obstruction of business 1433

Source: Korean Confederation of Trade Unions, 1996.

6. Politics in unions: Leadership and recent issues

Dif fic ulties of leadership

Table 5. Factors that cause difficulties for leadership (%)

Factor size -1 -2 -3 -4 -5 -6 -7 Tot al No.

Size 1: below 300; size 2: 300 1,000; size 3: over 1,000

Union finance and expendit ure

Exploring new resources for solidarity

7. Conclusion: Future tasks

FKTU: Federation of Korean Trade Unions

KCIIF: Korean Congre ss of Inde pende nt Industri al Trade Un ion Federation

KCTU: Korean Council of Trade Union Representatives (1993-1995)

KCTU: Korean Confedera tion of Trade Uni ons (1995-)

KTUC: Korea Trade Union Congress

LMCC: Labour-Management Cooperative Council

NCRITU: National Council of Regional and Industrial Trade Unions

: Beneath the miracle (Berkeley, California, University of California Press, 1989).

Kim, K.-D.: The sociology of industrial relations (Seoul, Kyungmunsa, 1992).

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