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The Need for Work Sharing to Achieve Work-Life Balance, and Its Direction

The Need for Work Sharing to Achieve Work-Life Balance, and Its Direction


Introduction

The real economy continues to crumble as the US-triggered financial crisis spreads throughout the world. For the Korean economy, a similarly pessimistic outlook prevails. Unlike the 1990s financial crisis, which was followed by a V-shaped recovery driven by export growth thanks to a weak currency, with this crisis the Korean economy is expected to undergo a pro-longed downturn as a result of the contraction in domestic demand, exports, and facilities in-vestment. Employment is also worsening rapidly. According to employment statistics published by the Korean National Statistical Office, 950,000 Koreans were unemployed as of March 2009, and the annual average for this year is expected to top 1 million if the economy grows by -2.0% (KLI estimate). The overall unemployment rate increased to 4% for the first time in 3 years, even as the economically inactive population (such as discouraged workers) grows, and the employment crisis is spreading to all age groups, rather than only affecting those in their twenties. 
As the nation braces for the worst job crisis since the 1990s financial crisis, work sharing has become the highest national priority from early this year, one that requires cooperation from all major economic players. In the Emergency Economic Meeting held on January 29, 2009, the government unveiled its work-sharing support programs, and the Labor-Management-Private-Government Agreement to address the economic crisis, led by the Federation of Korean Trade Unions and the Korean Employers’ Association (hereinafter the 2/23 Agreement), was announced on February 23, 2009. As the government took the initiative to increase new hiring by lowering salaries for entry-level university graduates, the Federation of Korean Industries (FKI) responded in kind, announcing a new policy to increase jobs by reducing salaries for entry-level university graduates among the top 30 companies. Unlike during the 1990s financial crisis, companies remain cautious about forced restructuring, as more of them are taking part in work sharing through such methods as wage freezes, partial wage returns, wage cuts, and working-hour rearrangements.  
But it is not without its share of problems. Whereas work sharing should be determined by the function number of jobs × work hours × wage rate, the current campaign is focused more on wage adjustment than on work-hour reduction. But it is not clear how the resources secured by wage cuts or freezes in the public and private sectors can be used to create proper jobs. In fact, critics argue that such methods will not accomplish the intended goal and will end up creating only temporary jobs, such as youth internships (J.-M. Cho, 2009). The work sharing imple-mented at each workplace is more of an effort to maintain the overall number of jobs for the time being as the economy continues to sour, rather than a fundamental solution to create new jobs when the national economy continues to suffer from jobless growth and the employment rate remains stagnant. To add new dimensions to the current work-sharing campaign and create new jobs in the mid-to-long term, it is necessary to further refine the related policy instruments such as work-hour reduction (S.-J. Cho, 2009). It is from this perspective that this paper will briefly review the need for work sharing to achieve work-family balance and how it can be implemented in the future.  

※ This is a translated version of a paper published in the Monthly Labor Review (KLI, May 2009).
※ Hoon Kim, Senior Research Fellow, Korea Labor Institute (Email: hoonkh@kli.re.kr)
※ Soo Kyeong Hwang, Research Fellow, Korea Labor Institute (Email: skhwang@kli.re.kr)

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