Lee Jae-myung’s labor board system

The presidential candidate of the Democratic Party of Korea Lee Jae-myung said the introduction of the labor board system at public institutions only needs to be decided and is necessary during a meeting with the leadership of the Federation of Korean Trade Unions. Lee also said that the ruling party should pass the bill independently in case of the opposition party’s objection.

“The labor board system should be introduced to public institutions and then expanded to semi-public institutions and the private sector,” Lee said a week ago. The Democratic Party of Korea said it will be processed without any problems during a regular session of the National Assembly.

The labor board system at public institutions allows the labor representatives of public institutions to get involved in decision-making with the right to speak and vote. It was one of the presidential pledges of the Moon Jae-in administration and 100 national initiatives but faced significant opposition within the government and was introduced to local public institutions in Seoul and Gyeonggi Province, excluding central public institutions. The labor sector argues that the system will enhance transparency at public institutions but the business sector is concerned about a potential increase in welfare requests and decrease in business efficiency.

In particular, there are concerns that the balance between labor and management will be broken, making business innovations difficult and undermining the rights of stakeholders if the system is expanded to the private sector. Germany, which is the benchmark of the system for the South Korean labor sector and ruling party, has a reasonable relationship between labor and management in place, unlike South Korea, and the supervisor board attended by labor leadership and the business board led by a CEO are separated. Under the circumstances, Lee ordered the quick passing of the bill to mandate the labor board system at public institutions.

Under the current administration, public institutions’ performance has worsened as they have had to share the burden of government policies, such as strengthening new renewable energy. Half of the large public institutions are struggling to pay interest with their profits. Public institutions’ debt, which may have to be paid back with tax in certain circumstances, accounts for 60 percent of the national debt. There are many institutions that reduced the number of new post-college employees to be recruited as they had to transition the employees of subcontractors into regular positions due to the government’s policy to remove all irregular positions.

It is irresponsible for the presidential candidate of the ruling party to push the introduction of a system that will make the restructuring of public institutions difficult as they require hard efforts to innovate business. He will face criticism for further reinforcing the strong labor unions of public institutions to earn the support of the labor sector for the election.