S. Korea pays dearly for growth policy

The wave of industrial unrest that engulfed South Korea is the result of years of repression and deception of workers, says Filipino sociology professor Walden Bello in this exclusive Inter Press Service column.

MANILA (IPS): The current confrontation between labor and government in South Korea has produced a stream of criticisms of Korean workers from many sectors of the mainstream media.

Korean workers have been portrayed as an intransigent and privileged group -- intent on placing their narrow interests above that of the nation -- by opposing President Kim Young-Sam's labor reforms designed to allow the Korean economy to adjust to the challenges of foreign competition.

Labor's sin is compounded, in the view of many commentators, by its manner of opposing the reforms. Why persist in taking to the streets in near revolutionary fashion when the issue can be resolved via negotiation and collective bargaining?

If there is anybody to blame for the current crisis, however, it is not labor but government and management. The readiness of workers to take to the streets stems from a history of being systematically excluded from any influence over production and the social distribution of the fruits of production.

From the time of Gen. Park Chung-Hee in the mid-1960s to that of strongman Chun Doo-Hwan in the 1980's, government and management cooperated to devise one of the most exclusionary practices of organizing production, based on pervasive police repression and draconian labor legislation.

The notorious Korean Central Intelligence Agency, in fact, evolved with the task of infiltrating factories to weed out labor activists, and labor laws were written in such as way as to make it practically impossible to engage in a legal strike.

Factory management in South Korea evolved along totally different lines from Japan, where workers were incorporated into decision-making on the factory floor. In Korea, workers were totally excluded from any say, not only over their wages but any other aspect of production.

The only way workers could make themselves heard was by taking to the streets in actions that bordered on rebellion. The latest strike activity engulfing Korea is the latest manifestation of an insurrectionary tradition that began in the early seventies with the altruistic suicide of labor leader Jeon Tae-il, who set himself on fire to call attention to the plight of textile workers, most of them women.

Despite the role played by a massive insurrectionary wave of strikes in ending the military dictatorship in the late 1980s, labor won only fragile concessions from government and management. In recent years, a massive deployment of police and soldiers has remained the only response to big strike action.

Thus workers were outraged by the extraordinary early-morning parliamentary session on Dec. 26 when only ruling party members convened to push through labor "reforms" which gave management the right to fire people in the name of "flexibility". The secret session fell right into the government's traditional method of management - by deception and repression.

Workers immediately attempted to redress the situation in the only way that experience had shown to be effective: by shutting down the country and taking to the streets.

The government-management alliance is responsible for not only foreclosing the option of negotiating with labor, but also for the current crisis in the economy - which is being blamed on labor's "inflexible" demands for higher wages.

South Korea indeed has lost its competitive edge, in terms of blue collar salaries, to the lower wage economies of Southeast Asia. But management and government had ample warning from experts about the dangers of competing on the basis of low wages and enough time to restructure the economy around a highly skilled labor force managing a more technologically advanced productive system.

Instead of investment in large-scale programs to upgrade workers' skills, and intensifying research and development to produce a more technologically independent economy, management and government chose to ignore the warning signs in the critical years of the 1980s.

As a result, Korea today has not moved much beyond its comparative advantage in the 1970's - the efficient organization of a low-cost work force applying borrowed or licensed process technologies.

This is no longer an advantage, and the country finds itself no longer competitive in terms of labor-intensive production and unable to move up to higher-value-added, skill-and- technology intensive production.

The quality of management-labor relations in South Korea is central to the structural crisis of its economy, for the only way the country could have gone the route of upgrading the skills of its work force and its techno-industrial structure would have been to win the cooperation of labor.

Had government and management reached out to labor and set relations among them on a new basis - communications, compromise, and trust - labor could possibly have been won over to a social contract. Workers may have agreed to forego wage raises in return for management's abstaining from increased profits in order to create a "joint social fund" devoted to labor and technological upgrading programs.

This was, to use Robert Frost's nostalgic image, "the road not taken" and provides a sobering lesson for other industrial economies.

A country may be able to purchase a decade or two of high growth through the repressive management of labor but this erodes the foundation for establishing a relationship of trust, communication, and collective bargaining. These are essential in forging the social consensus necessary to move the economy to higher, more complex stages of development once the phase of early industrialization is past.

One cannot escape the consequences of choices made early on the road to development. With the creation of a "us" against "them" class culture that is as profoundly antagonistic as any found in 19th century Europe, Korea is now paying dearly for the early decision of its elites to undertake build a modern industrial economy via labor repression.

Walden Bello is a co-director of the Bangkok-based Focus on the Global South and professor of sociology and public administration at the University of the Philippines.