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[Editorial] Mass Layoffs vs. Job Sharing

Posted January. 17, 2009 08:35,   


Japan’s leading automaker Toyota will suspend production for 11 days in February and March and implement wage cuts of 20 percent for two of the 11 days. Other Japanese carmakers such as Mitsubishi and Mazda also seek to keep down labor costs. Their strategy to overcome the global economic crisis is lowering wages and working hours rather than laying off workers. The Japan Business Federation and the Japanese Trade Union Confederation, the country`s largest union, say they will make joints efforts for job security and sharing.

Businesses are making all-out efforts to weather the economic turmoil, which has resulted in falling sales and profits. Believing job sharing is a wiser choice than laying off experienced workers, Japanese and European companies are putting their heads together with unions to find a solution. This is because massive layoffs will not only spread social unrest, but also pose problems in normalizing production and maintaining quality when the economy picks up.

Certain Korean companies have also opted to share jobs instead of laying off employees. To reduce expenses, labor and management of Hynix Semiconductor reached an agreement last month for senior officers to take pay cuts and for employees to return welfare benefits and take unpaid leave. Only a small fraction of domestic companies have done the same, however, due to resistance from their unions. Certain unions are threatening to go on strike unless all of their unreasonable demands are met. The union of Hyundai Motor is demanding a reduction in working hours while maintaining wage levels. It has urged a walkout at a convention slated for Monday. Who else in the world proposes a strike when both domestic and overseas markets are facing a serious crisis?

The job market is on red alert as companies let go of a huge number of temporary workers all over the country. If creating jobs or passing a law on improving the job security of non-regular workers is difficult, it is imperative for the government to take drastic action, such as giving incentives to companies that share jobs. In the second Meeting for Emergency Economic Measures Thursday, President Lee Myung-bak suggested wage cuts as a means of sharing the pain and promoting job creation under a "job sharing" program. More companies will participate in the program if financial and tax incentives are offered instead of empty rhetoric.