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Faculty Sponsor

Dr. Ali Rassuli

Department/Program

Department of Economics

University Affiliation

Indiana University – Purdue University Fort Wayne

Abstract

This study explains the structure of the temporary or irregular form of employment in South Korea. In Korea, the size of the irregular workers as a percentage of labor force increased from 43.4% to 52.7% from 1996 to 2005. Both the sheer absolute size and the rapid rate of growth are evidence for the dominance of this form of employment in Korea. However, irregular workers are generally kept deprived of health insurance, unemployment insurance, overtime payments, retirement allowances, and any kind of bonuses. Largely, irregular Korean workers are subject to job insecurity and meager pay rates. While there is the institution of a social security system in place for the irregular workers in Korea, due to the lenient law enforcement of social security obligations, firms find it cost effective to evade giving these benefits and hence employ more and more from the irregular segment of the labor force.

Almost 70% of all irregular workers are females who are employed as part-timers, on-call workers, and day laborers, through temporary agencies, subcontracting companies, and independent contractors. Over time, the powerful dominant enterprises have successfully managed to maintain low wage payments to irregular female workers relative to male workers. Persistence of the wage differentials between male and female irregular workers highlights the cost advantage of hiring female workers and the temporal exit of more male workers from the irregular labor force.

There are institutions of labor unions for workers in Korea which are significantly represented by the male workers. The female union membership went down from 36.7% in 1980 to 21.1% in 2003 whereas that of the male union members increased from 63.3% to 78.9% in the same period. The lenient laws and cursory light enforcement of regulations by the government and gender discrimination in the trade unions have led to the development of non-governmental organizations (NGOs) of women worker activists undertaking the lead role in support of irregular worker movements such as the Korean Women Workers’ Association United (KWWAU). However, in South Korea, there are large, conglomerate family-controlled firms with strong ties to the government known as the “chaebol”. The chaebol have an important role in controlling the irregular labor force. The supportive policies regarding the employment of the irregular workers are for the most parts weaved around the interests and benefits of the chaebols.

Disciplines

Business | International Business

The Structure of the Temporary Labor Market in South Korea

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