‘Differentiated support should be provided,’ says Pres. Yoon

“Government support should be differentiated for companies that pursue a transition into job-centered performance-related pay versus companies that make compromises with ‘noble’ labor unions and maintain the seniority system,” President Yoon Suk Yeol said on Sunday.

“Economic growth should be driven by transforming the labor sector. There is no future for a country that focuses on maintaining vested rights and rent-seeking,” President Yoon said in his New Year’s speech announced in the presidential office. “The ‘three major reforms’ for labor, education, and pension, on which South Korea’s future and the fate of the country’s future generations depend, cannot be further delayed.” The president said the year 2023, his second year in office, will mark the beginning of the ‘three major reforms,’ announced a war against vested rights.

“The Korean Confederation of Trade Unions is the one with vested rights in the labor reform,” said a member of the presidential office. Even though the president did not explicitly mention it in his New Year’s speech, it is deemed that the Korean Confederation of Trade Unions is defined as a noble labor union, and companies that compromise with labor unions will be subject to disadvantages in terms of government support. “We will enhance flexibility in the labor market to establish fair relationships between labor and management and between labor and labor,” President Yoon said. “We will improve the dual structure in the labor market. The starting point of the labor reform is the labor-management rule of law.”

The president proposed export and new future strategic technologies as solutions to address the complex global economic crisis. He added that the focus of all diplomatic efforts will be on the economy and that he will pay direct attention to export strategy. “Projects to win overseas orders worth 50 billion dollars will be run, and infrastructure construction, nuclear power generation, and the defense industry will be nurtured as new export drivers,” President Yoon said. “Trade finance will be expanded to the maximum level of 360 trillion won, and all policy capabilities will be utilized.”


Kwan-Seok Jang jks@donga.com