Globalization, Financial Crisis, and Industrial Relations: The Case of South Korea

Abstract

The South Korean case shows that the globalization trend in the 1990s and the 1997–1998 financial crisis had two contrasting effects on labor rights. First, these developments resulted in negative labor market outcomes: increased unemployment, greater use of contingent workers, and widened income inequalities. On the other hand, they led international organizations such as the Organization for Economic Co‐operation and Development (OECD) and the International Labor Organization (ILO) to play important roles in improving labor standards in Korea. Also, continued restructuring drives prompted unions to merge into industrial unions and wage strikes with increased frequency and intensity. Contrary to the common belief, the Korean case shows that globalization and intensified competition resulted in stronger and strategic responses from labor by stimulating employees’ interest in and reliance on trade unionism.

The Effects of Mutual Trustworthiness between Labour and Management in Adopting High Performance Work Systems

“…Korea has experienced a strong labour movement since the late 1970s, with wildcat strikes in the 70s and early 80s (Kim and Kim, 2003). Political democratization in 1987 aided labour union activism and ushered in a new era of confrontational employment relations (Kong, 2012).…”

“…The Korean State, during the 80s and the 90s, played the role of a benevolent dictator vis-à-vis employees. The government legislated laws to protect employee rights while at the same time suppressing independent labour movements (Kim and Kim, 2003). Collectively, both the government and employers considered militant labour to be a major problem (Wilkinson, 1994;Park et al, 1997).…”

“…The financial crisis and subsequent layoffs led to a series of general strikes resulting in a substantial increase in strike activity from 78 in 1997 to 462 in 2004462 in (KLI, 2010. During the same period, unorganized employees also started to express their desire for employment security and discontent with their working conditions and wages through grass-roots organizing (Kim and Kim, 2003).…”

“…To this end, in 1998, a Tripartite Commission was established and given two pivotal functions: a consensual restructuring of the Korean economy and a revision of Korean labour law in accordance with OECD and ILO standards (Kim and Kim, 2003). Moreover, the Korean government also promoted Labour Management Councils (LMC) 5 to improve employer-employee relations.…”

Labor Rights in East Asia: Progress or Regress?

“…Malaysia and the Philippines have relatively high unionization rates for the region, but membership levels are stagnating or in decline (Ahmad 2002;Bacungan and Ofreneo 2002). In South Korea, union density was in decline until the late 1990s, when teachers and state employees were permitted to unionize (Kim and Kim 2003). Vietnam, in contrast, may be experiencing an increase in unionization.…”