[Editorial] Flawed Industrial Unions

The labor unions of Hyundai, Kia, GM Daewoo, and Ssangyong Motor will vote on the transformation of the structure of their unions to that of the national metal union for three days starting from today. If two-thirds of them agree, their unions will change its structure from the current individual corporate unions to an industrial union. By the end of this month, the same vote will take place in about 20 businesses.

The Korean Confederation of Trade Unions (KCTU) and the related unions argue that if they unite as an industrial union, they will have more negotiating power to the benefit of union members. But foreign cases confirm that the shift to the industrial union will more likely do more harm to individual unions than good.

Unreasonable demands from the United Auto Workers (UAW) caused huge financial problems for American automotive companies, which reached the point of being unable to sustain without massive layoffs. Recently, UAW President Rom Getelfinger began to call for changes and sacrifices of labor unions. But it is not certain when the suffering of the automotive companies and their employees will end.

In an industrial union, most decisions are made at the top. This is because it is close to impossible for individual unions -with different management and working conditions - to reach an agreement if they listen to every voice in the field. Activists are likely to end up separating from the work field, engaging in “political fights” while union members will often be called to strikes.

Industrial unions force member companies to introduce uniform working conditions and wages despite different conditions that each company faces. This goes against market principles and will squeeze small and medium sized companies. Regional, local negotiations, an additional process that industrial unions have to go through, are also extremely energy-consuming. Industrial unions might strengthen benefits for individual unions for the short-term but undermine corporate competitiveness, reducing jobs for the long-term.

A series of scandals at the top, and reckless political fights of the KCTU led to decreased support from the public and reduced organization. It seems that they want to find a way out through the shift to industrial unions. But they will lose more than gain in the end if the change of its structure worsens unstable labor relations and accelerates the fall of corporate competitiveness.