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South Korea THE LABOR FORCE
Despite significant increases in wages in the 1980s, labor
unions in the late 1980s continued their wave of strikes
demanding better working conditions and wages. The ferocity and
sheer size of the labor movement caught management and the
government by surprise. During his first year or so in office,
President Roh Tae Woo was confronted with considerable labor
unrest; there were more than 300 strikes in the first three
months of 1989
(see Interest Groups
, ch. 4). Emboldened by the
political reforms of 1987 and by reports that the rate of South
Korea's economic growth was greater than the improvements in
their own incomes and life-styles, many workers agitated for a
greater share of the nation's prosperity and sought more freedom
and responsibility at the workplace and an end to the traditional
paternalism of management. Lost production was estimated to have
climbed to US$6 billion in 1989 from US$4.4 billion in 1988.
Workers were caught in a revolution of rising expectations,
as a wave of rising urban land values and housing costs outpaced
average real wage increases of more than 70 percent during the
1980s. Moreover, wages for manual workers, who were responsible
for much of the production and export that fueled the economy,
were much lower than the national average. In the late 1980s,
working families still found themselves struggling to meet
minimum standards of living. Employees also were expected to work
long and often erratic hours in exchange for steady employment
and were frustrated over a lack of benefits and individual say.
One labor activist noted in 1989 that the labor movement "is not
a class struggle. We just want better working conditions and
better status for workers. We have been looked down on in Korea
for a very long time."
Worker complaints were focused on three areas: low wages,
long working hours, and a high number of industrial accidents. In
1986 the average wage of a South Korean worker was US$381 a month
(339,474 won), including overtime and all allowances. The basic
wage was US$287, or 255,408 won, but, according to the
government, the basic wage necessary to sustain a "decent" way of
life was US$588 (524,113 won). Thus, the average worker only
earned two-thirds of what the government thought necessary to
sustain a family of four. In 1987 semiskilled workers typically
received US$1.50 to US$2.00 per hour and worked fifty-five to
sixty hours a week; unskilled workers worked twelve-hour days
seven days a week, earning US$125 a month.
There were, however, dramatic increases in wages in 1988 and
1989. Labor stoppages in the manufacturing sector, coupled with a
scarcity of labor, led to 20-percent salary increases for workers
in the manufacturing sector in 1988 and 25-percent salary
increases in that sector in 1989. These raises later spread,
increasing wages across the entire economy 18.7 percent in 1989.
By 1989 some South Korean economists were worrying about the
effect that skyrocketing wages would have on the cost of
domestic-made goods and the consequent impact on export prices.
The situation was was especially worrisome because the wages paid
to workers in South Korea's major competitors were growing far
more slowly.
South Korea was known for having the world's longest working
hours. In 1986 the Korean worker averaged about 54.7 hours a
week. This situation was the natural consequence of the low wage
system that necessitated extended hours and extra work to earn
minimum living expenses.
Data as of June 1990
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