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2002-10-28 13:54:54, 조회 : 80 |
Report 2000
South Korean Women
Workers and Globalization
October 15, 2000
Korean Women Workers Associations United
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Seoul Women Workers Association Puchon Women Workers Association Ansan Women Workers Association Inchon Women Workers Association North Cholla Women Workers Association Kwang-ju Women Workers Association Masan-Changwon Women Workers
Association Pusan Women Association
Sponsored by Ministry of Government Administration and Home Affairs
Report 2000
South Korean Women
Workers and Globalization
October 15, 2000
Research Team:
Jin-young Park, Sun-im Kim, Young-jung Kim, Ju-yoen Jung, and
Hye-young Chae.
Korean Women Workers Associations United
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Seoul Women Workers Association Puchon Women Workers Association Ansan Women Workers Association Inchon Women Workers Association North Cholla Women Workers Association Kwang-ju Women Workers Association Masan-Changwon Women Workers
Association Pusan Women Association
Sponsored by Ministry of Government Administration and Home Affairs
Contents
Preface
Introduction
Ⅰ. Understanding Globalization 8
1. What is Globalization? 8
2. The Historical Background of Globalization 9
3. Characteristics of Globalization 12
1) Quick Trade 12
2) Flow of Fast Money 12
3) Global-scale Production 14
4. The Consequences of Globalization -- Effects on Workers 15
1) Concentration of Wealth 15
2) Unemployment and Low-wage Labor - The Flexibility of the
Labor Market 16
3) The Feminization of Poverty 17
Ⅱ. Globalization and Korea 19
1. Globalization and Changes in the South Korean Economy 19
1) 1960 to the End of 1970 20
(1) 1960 ∼ early 1970s (light industries)
(2) mid-1970s ∼ early 1980s (Heavy Industries)
2) 1980s ∼ early 1990s 22
3) early 1990s ∼ 1997 24
4) End of 1997 to the Present (post-IMF structure) 25
2. Labor Policy and Changes in Women's Labor Policy 28
1) Before 1980 28
2) 1993 - 1996 (Beginnings of a Flexible Labor Market) 32
3) 1997 - 2000 Present (IMF and Labor Policy) 38
Ⅲ. The Economic Crisis of Korea and Women Workers 42
1. The Situation of Women Workers After Industrialization 42
2. The Impact of the Economic Crisis on Women Workers 44
1) Changes in the Female Labor Market 45
(1) Women Fired First
(2) The Irregular Employment of Women Workers
(3) Aggravation of Labor Conditions
2) Social and Cultural Oppression - Patriarchal Ideology 59
3. The Experience and Resistance of Women Workers 62
1) The Suffering of Women Workers 62
(1) Labor Market Exclusion
(2) Employment Instability
(3) The Problem of Poverty
2) Resistance and Politicization of Women Workers 75
(1) Politicization as Women Workers
(2) Organizational Struggle
(3) The Experience of Victory - the Potential of Solidarity
IV. Alternatives to Globalization 88
1. Responses in Korea 89
1) Problems of the Korean Female Labor Policy 89
(1) Policies Aimed for Employment Stability
(2) Policies Towards Equality of Employment
(3) Policies Against Poverty
2) Women Workers' Responses 96
2. International Solidarity and Struggle Against Globalizatioin 97
3. International Solidarity of Women 99
References 101
Preface
The effect of globalization on women workers has been more negative than positive. In addition, it is rare that the problem of women workers is not mentioned when discussing problems of globalization. However, it is even rarer to hear it with their voices and through their eyes.
Despite the voices of protest and criticism, globalization is continuing at a rapid pace. However, the voices of women have always been excluded. In order to bring about changes in this situation, a forum to hear their voices is needed. In October 2000, the ASEM Summit, which is for the advancement of free treed, will be held in Korea. Women need to voice their opinions in this opportunity. We need to ensure that women will no longer be the sacrificial lambs of globalization by pressuring governments through struggle and solidarity.
We are hosting this workshop on the experience and responses of women workers to globalization, and through this there will be great solidarity among women. The purpose of this report is to share the Korean experience. Despite the fact that each society is affected in different ways, the workers of many countries are experiencing similar situations as Korean women workers. We hope that the similarities will be made apparent to the participants during this meeting. Through this lies the potential for international solidarity.
We would like to take this opportunity to thank the women who gave their precious time for these interviews. We would also like to thank Kim Kyoung-hee who gave her advice on the findings of this report. And lastly, we would like to sincerely thank the research team who worked for over 6 months to write this report: Sun-im Kim, Young-jung Kim, Jin-young Park, Ju-yoen Jung, and Hye-young Chae. Only through their effort and sacrifices was this report made possible.
We hope that this report will be of some help to create a better world for these women workers toiling in workplaces even today.
Korean Women Workers Associations United
Chairperson Maria Rhie Chul Soon
Introduction:
Starting the Research
It has not been long since Korea first heard the word 'globalization.' However, globalization has had a huge influences on the lives of our workers. Many workers are in unstable employment situations and getting poorer. Many studies revealed that globalization is creating more poverty. These studies also show that women workers are the group most victimized by globalization. That is because the unstability of labor and proliferation of poverty is prominent among women workers.
In Korea, over 70% of employed women are irregular workers, shuttling between employed, unemployed and underemployed, and number increases continuously. As a result, women are slipping into poverty faster than ant other group.
There are few studies seriously researching how and why women workers are trapped in this situation. The problems women workers are facing cannot simply be reduced to a problem of globalization. We need to take one step further and use this example to reveal the dark side of globalization. We need to ask how and why. Only then will the true color of the powers that made women workers their scapegoat be revealed.
It is necessary to look at this problem from the viewpoint women workers. This is not to say which group is suffering the most from globalization, but rather to stand in their shoes and ask the most basic and fundamental questions of why and how. And this should be our starting point to change the world.
With this mind our research team began with 5 members(Sun-im Kim, Young-jung Kim, Jin-young Park, Ju-yoen Jung, Hye-young Chae). The methodology we used was interviews and document research, including government documents, research reports and statistical data. We conducted interviews with 8 women workers unemployed or irregularly employed, who were on the margins of the labor market.
In the report we tried to explain globalization, the changes in the Korean economy, the changes in the labor policy of Korean government, and the changing situation of women workers. We also tried to illustrate the ways that patriarchal ideology rationalizes the situation of women workers. And lastly, we tried to give voices to the experiences of women workers, especially under the economic crisis of 1997 - their personal stories, their processes of politicization, and struggle to uphold their rights. We do not deny that Korea's situation has its own unique characteristics. Neither can we deny that many women workers all over the world have already had or will have the same experiences under globalized capitalism. We hope that the situations, experiences and struggles of Korean women workers can help other women workers in another countries in a similar situations, as the Korean workers did from hearing of theirs.
I. Understanding Globalization
1. What is Globalization?
Globalization is the term used to indicate the domination of transnational capital in a new phase of capital development. With an increase in the activities of transnational capital and the development of information technology, the system of production took on a global scale. In this way, on a level that cannot even be compared the phase of capitalism before this, the movement of capital became possible in a free and fast way, and endless competition between capital began. Globalization is the concept which encompasses this process and the different form of capitalism.
Similarly, globalization is the ideological foundation for neo-liberalism. On closer examination of the characteristics and process of entry, globalization focuses on the reduction of state intervention and the market principle, and neo-liberalist thought, touted by transnational capital, makes that job easier. In addition, it is also reinforcing the logic of neo-liberalism. At this time, state intervention in the economy was contrary to neo-liberal market principles which allowed maximum profit through continuous competition. Accordingly, beginning in the 80s, almost all countries have adopted neo-liberal economic policies and developed regulations in those areas. In this way, the obstacle of national borders to transnational capital was solved and globalization has been able to progress more speedy fashion. Also, globalization made it more difficult for governments to put controls on economic growth which had been possible through the development of regulations. as well as strengthening the power/influence of neo-liberalism that was strengthened by opening of markets, competition, and market principles. Through this mutual and complex relationship, neo-liberalism currently stands at the center of globalization(Yoon Jin-ho, 2000).
2. The Historical Background of Globalization
- The Advent of Neo-Liberalism and Globalized
Capital
On reflection of the path of world economies of capitalism to the present, it can be asserted that, although with varying highs and lows, it is essentially a history of free market capitalism, which lies at the center stage of US monopolistic capital, gaining control of the world economy(Kang Su-dol, 1998). Therefore we can understand globalization and neo-liberalism in this historical background.
Neo-liberalism as we know it today, appears as a new form of modern liberalism after the 1970s, during the world-wide 'Long Depression.' However, a closer examination reveals that the roots of neo-liberal thought can be traced to classic capitalism before the Great Depression of the United States during the 1930s and Keynesian theory of modern capitalism. Liberal capitalism which emphasized the need for free competition without state restrictions can be first found during the Great Depression in the 1930s. The Great Depression began with the non-governmental character of production. Namely, the situation in which the ability to adjust or regulate production globally is weakened, production exceeds the capacity for consumption, resulting in bankrupt businesses, mass production of unemployed, and a decline in purchasing power. This vicious cycle was the Great Depression. The effort of capitalism to overcome this structural crisis was the birth of Keynesianism.
According to Keynesian theory, if capitalism is to continue grow, full employment must be attained, and government and central bank intervention is necessary to accomplish this. In reality, advanced capitalistic countries enjoyed a 'Golden Age" after World War II until the mid-70s as they achieved unprecedented growth and high levels of welfare. This was due to the Fordist accumulation system which was represented in the Keynesian macroeconomic stabilization policies, a state welfare system, and 'large scale production-large scale consumption.' However, Keynesianism faced a crisis in the 1970s. This was because the economic growth rate and production growth rate of western developed countries decreased, while high unemployment and high cost of living accelerated. After the 70s, growth slowed, the source of tax income decreased while welfare demand increased due to unemployment and poverty, placing greater burden on budget expenditures, and resulted in large scale budget deficit. This kind of large scale deficit caused a sudden rise in inflation and wages due to collective bargaining, and in the process capital profit margin decreased greatly. The capital of developed countries sought overseas markets and overseas investment areas in order to overcome this crisis of profitability, this was an important element in globalizing markets and production. At this time, a new ideology emerged which argued for a reduction in state intervention and a return to the market, and this was called 'neo-liberalism.' As a result, Keynesianism collapsed, and neo-liberalist policies of economic deregulation, production flexibility, and capital liberalization attempted to recover profitability and respond to the recession.
One notable capital recession policy was the policy of 'revitalizing transnational financial capital.' At a time when it was difficult to expect high profits from investment in the real sector, financial capital developed spontaneously. Even during the recession of the 70s, financial capital expanded, and particularly the growth of transnational financial capital, which conducted cross-border activities, was notable. There are two backgrounds to this situation. First, after the collapse of the Bretton-Woods system which adopted a fixed exchange rate, the flexible exchange rate system was introduced and huge profits could be made by exploiting the changes in the exchange rate. Secondly, as the use of the US dollar spread throughout the world and the Euro-dollar market was formed, foreign investment powers could buy and sell dollars at will(Kang Sang-gu, 2000; Yoon Jin-ho, 2000).
Neo-liberalism's basic distinguishing characteristics are market control, cuts in public expenditure, deregulation, privatization of the public sector, strengthening of financial capital domination, and creating flexibility in the labor market. After the mid 70s, western capitalistic economies pursued high flexibility in the direct production process. They also aggressively pursued globalization of management and foreign direct investment, etc. The capital of developed countries moved labor-intensive sectors into the Third World, and at the same time pursued privatization, deregulation, and market opening in order to enlarge the global area of production and commodities market. As the Uruguay Round [of GATT] was concluded in December 1993 and the World Trade Organization was established in April 1994, globalization began to radically expand. This was because the tariff and non-tariff barriers which regulated global trade were broken down or reduced through the WTO Agreement. Therefore, the world became one large united market.
As discussed above, it is necessary to find the cause of globalization in the mechanism of capitalism. The reason that globalization gained quick prominence was that capital tried to increase accumulation of wealth in order to overcome the crisis of capital accumulation.
3. Characteristics of Globalization
There are some distinguishing characteristics of globalization as it attempts to maximize capital movement. The first characteristic is that global trade happens quickly; the amount of trade enormous; the flow of money becomes high speed, and lastly production happens on a global scale.
1) Quick Trade
Today, due to trade liberalization, the scale and speed of global trade has increased enormously. Similarly, the most important opportunity for the radical progression of trade liberalization was the enforcement of the WTO Agreement. The WTO was established to raise the living standards of its member countries through trade and mutual economic activities, and in reality got rid of tariffs, trade barriers and discriminatory treatment in international trade. In line with this goal, each country adopted measures on economic liberalization, foreign investment, and reduction of regulations on trade and capital flow. The result was the opportunity for endless competition of capital in the global market as national borders disappeared(Yoon Jin-ho, 2000). In fact, since the establishment of the WTO in 1994, a wave of foreign products and services has flooded every country in the world.
2) Flow of Fast Money
The scale of global capital movement was 536 billion dollars in 1991 and in four years skyrocketed to 1 trillion 258 billion dollars. This internationally moving capital is funds in the form of loans between businesses and state or financial institutions or investments in industry or the financial sector. This vast amount of funds is moving at the speed of light all over the world through the information superhighway. These funds are called 'money without nationality' because it freely enters and leaves all countries without discriminating time or place in search of investment returns.
In this situation, globalization has the characteristic of leading financial capital. In the early 90s, the amount of financial transactions between countries was 30-40 times greater than product transactions. Consider the amount of capital procurement(through the floating of government bonds) in the global capital market: in the second half of the 70s the amount was 81 billion dollars, and in 1989 it was 360 billion dollars, an increase of 4 times(Yoon Jin-ho, 2000).
However, as the globalization of finance developed, serious problems arose. As large-scale international speculative capital was formed and the number of foreign speculative transactions radically increased, the instability spread through the global economy, not just specific regions. Big capital, representing the interests of developed countries, formed big production-finance capital with the collaboration of short-term investments and financial capital. Abusing the liberalization of finance, big capital speculated in the financial markets of weak countries. Furthermore, the recent radical increase of foreign transactions, which should support and supplement international product transactions and capital investment, is creating a more unstable international financial market for short-term profit because of its speculative nature(Yoon Jin-ho, 2000). Similarly, as capital activities freely cross national borders, the previously existing national regulatory powers become obsolete. Global financial capital, through relief funds or other similar investment agreements with the IMF and the IBRD, structural adjustment programs were coerced and as a result there was socio-economic structural change in the coerced countries. Of course, this was to create a profitable environment for capital activities.
3) Global-scale Production
Globalized production is being pursued by TNCs who move freely across markets without borders. Currently around the world, there are 40,000 TNCs with 400,000 subsidiary companies. TNCs employ over 70 million people and produce over 25% of all globally manufactured products. TNCs control over 75% of global trade, and about half of this activity is conducted between the subsidiaries(Yoon Ho-won, 2000). Of the world's 100 TNCs, approximately 1/3 are from the United States, illustrating the power and influence of that country(Shin Hyun-jong, 2000). TNCs, through big capital, the latest technology, and lobbying skills, are increasing their global sales stronghold and pursue the maximization of profits. Under the banner of free trade, the barriers and regulations are falling, and through 'global commodities' are changing the each societies' traditional way of life. TNCs incite competition between factories to in the search for higher production, or move across borders in search cheaper production areas. This is the reason why there is a global decline in labor conditions.
4. The Consequences of Globalization
- Effects on Workers
Similarly to what Martin and Schuman called the 'society of 20 to 80' in 『The Globalization Trap』, globalization results in the concentration of power and wealth in the hands of a minority. In addition, labor conditions have worsened due to increasing competition and labor flexibility. In the reality where the majority of people do not have employment or social protection, the answer to the question, 'who is globalization for?' becomes clear. The biggest effect of globalization on workers is worsening labor conditions.
1) Concentration of Wealth
Globalization has done its part in creating more inequality in income between classes and countries. Wealth and power are focused on transnational corporations and a few wealthy countries, who in effect control international organizations such as the WTO and IMF. Meanwhile, developing countries are not able to escape from poverty. In 1970, the total debt of the Third World was 100 billion dollars US, 1 trillion dollars in 1988, and has grown to a currently 1.9 trillion dollars(Yoon Ho-won, 2000). Due to full-scale market opening, these countries are experiencing serious economic and social crises such as unemployment, mass layoffs, and job instability.
The world gross domestic product(GDP), which was 4 trillion dollars in 1960, increased to 23 trillion dollars by 1993, and the lion's share of 78% or 18 trillion dollars is from developed countries, while the share taken by developing countries, where 80% of the world's population lives, is a mere 5 trillion dollars. In addition, the individual income disparity between developed and developing countries increased 3 times from 5,700 dollars US in 1960 to 15,400 dollars US in 1993. Also, if the income of the global population is classified, the lowest 20% held 2.3% of the overall income but this decreased to 1.4% in 1991. In contrast, the top 20% increased from 70% to 85%(Bak Kwang-suh et al, 1999). Similarly, globalization is not only increasing the disparity between the rich and the poor, but is also worsening the problem of distribution of wealth within individual countries. In the case of South Korea, the problem of inequality worsened after the 1980s. According to a Korean Development Institute report, in 1993 the top 1% owned 30% of the wealth, and of 100 urban households, the number of those in poverty(households with incomes of less than 1/3 the average) had a sharp increase from 12 in 1993, 22 in 1994, and 26 in 1995. The unequal distribution of wealth worsened especially under the effects of IMF structural adjustment programs after the currency crisis. This kind of domestic disparity between the rich and the poor did not exclude developed countries. In the case of the United States, in 1972 the top 20% earned 7.5 times more than the lowest 20%, but by 1992 it had increased to over 11 times. In the case of England, in 1997 the top 20% earned 4 times more than the lowest 20%, but by 1991 it had grown to 7 times greater(Bak Kwang-suh et al, 1999).
2) Unemployment and Low-wage Labor - The Flexibility of the Labor Market
The intensification of competition is another phenomenon resulting from globalization together with the concentration of wealth and power. The opening of the national economy meant corporations, labor and unions faced competition from other countries. This resulted in further suppression of wages, increase in productivity and rational labor relations thus lowering the standard of wages globally.
In many OECD countries, the number of highly-paid full-time workers has declined sharply and unemployment is on the increase. This is caused by the flexibility measures of the late 1980s leading to a decline in the quality of employment making extremely low paying jobs and part-time work the norm. These flexibility measures freely allowed paycuts and work dismissal - central to the economic policies of neo-liberalism (Yoon Jin-ho, 2000). The rationale behind these measures is that Fordist labor relations protect high wages but not high profits. Accordingly, the main points of Fordist relations - labor promises high productivity to the government and capital, while remaining passive to the decisions of the management and government policy while the government and capitalists promise stable employment and high wages - and subsequent governmental restrictions on the labor market has paralyzed the function of the market to regulate the standard of wages and employment rate, leading to a decline in productivity(Yoon Jin-ho, 60). This shows that capital has made the labor market flexible through decreasing wages, marginalizing labor with dismissals, part-time jobs, dispatch labor, subcontracting and external contracts, easily controlling the number of workers depending on the changes in production. Finally, capital has taken predominance over labor.
The situation in developing countries is even more severe than developed countries. Russia and Eastern Europe have unemployment rates of over 20% and in other Third World countries, an estimated one billion people are unemployed or have unstable jobs. This is mainly caused by the restructuring programs undertaken by the US and the World Bank which has all but destroyed the public and the agricultural sectors and brought about the decrease in local markets (Lee Chan-geun, 1999). As mentioned before, the intensification of global competition under the auspices of "strengthening national competitiveness" has brought suffering to the workers and weaken labor unions.
3) The Feminization of Poverty
According to UN reports, 66% of working time on a daily basis is undertaken by women who only earn 10% of the global income and own 1% of the real estate, and form 70% of the world's poor of 1.3 billion. Women still receive 25% to 50% lower income compared to men. Companies view women as more passive with less organizational ability and easy to dismiss when married or pregnant. Women are more exposed to unstable and oppressive situations where subcontracting, part-time and seasonal labor is being substituted for full-time jobs. Women's labor is considered supplementary enabling easy dismissal. 94% of these women work as part-time and unorganized labor, receiving no social and legal protection and are in no condition to expect any aid from labor organizations(International News No. 91). Big capital invested heavily in Third World countries, building up industries which require intensive women's labor. Women have, to this day, been oppressed by double labor and with globalization, and have become marginalized and poorer. The globalization of capital in search of cheaper and 'flexible' labor has only led to the worsening of the status of women.
II. Globalization and Korea
1. Globalization and Changes in the South Korean
Economy
This chapter will analyze the changes in the Post-Korean War economy in lieu with the global economy system. With most of its industries destroyed during the war, the South Korean economy grew rapidly with technological advancement. Transformation was also made into labor-intensive but high-value light industries such as telecommunications and semi-conductors. However, the structure of the Korean economy and industrial changes were not due to internal causes but to the global economic and political changes in the post-World War 2 era. With little industrialization and abundant idle labor, the South Korean economy relying on US aid became totally dependent on the US economy. Any changes in the US-dominated world economy became reflected in the South Korean industrial and economic sectors. Accordingly, the economic crisis of 1997 was not only caused by the weaknesses in the South Korean economy but more importantly by the new changes in the world economy. This chapter will examine how Korean economic policies reflected the larger world economy since the export-oriented industrialization of the 1960s.
The five periods described below have been divided following important changes in the Korean economy. Export-oriented industrialization of the 1960s and the 1970s, the industrial restructuring and the opening of the Korean markets following the pressures of Reaganomics of the 1980s, heavy foreign investments of Korean companies following the policy of globalization in the 1990s, and finally, the post-1997 restructuring following the economic crisis in line with the neo-liberal global economic order.
1) 1960 to the End of 1970
This period saw rapid economic growth in the export-led labor-intensive industries. The government increased exports and imports were kept to a minimum level to strengthen national prosperity. Light industries were encouraged just like in the 1960s. However, the export-led economic policies were caused by the unique geographical and political situation of Korea and the changes facing the global economy especially the US economy. The export-led economy resulted in the growth of an undemocratic economic structure and unbalanced industrial sector with the birth of the chaebols, irrational banking methods, and political and capital conglutination. Thus, many problems of the Korean economy arose in this period of export-led light industries and heavy chemical industries.
(1) 1960 ∼ early 1970s (light industries)
With the acceptance of US aid in the 1950s, the Korean economy lost almost all its potential for independent economic growth. However, with the emergence of the Park Chung Hee's regime following the 5.16 coup d'etat. national prosperity was emphasized to reduce the people's antagonism toward the new regime and to gain some popularity. Export-oriented but labor-intensive light industries were encouraged. and 5-year economic plans were launched to stimulate economic growth. Foreign investors were sought to carry out such programs.
The need for foreign investment and availability of abundant idle labor in the 1960s enabled the implementation of the export-oriented economic policy in Korea. This policy was accompanied by the changes in the US economic policy due to the Cold War. Many developed countries including the US were beginning to face economic depression after enjoying post-war economic boom, and felt the need to export their low-profit making and labor-intensive industries to developing countries in search of cheap labor to reduce the costs of production and maximize their profits. The US assumed the role of the guardian angel of capitalism in East Asia and to protect its interests, it needed to prolong the Cold war structure. Role models were needed to show off the US-style of economic development(Research Meeting on Unstable Labor, 2000). Countries like South Korea and Taiwan(both divided and anti-Communist) were needed to flaunt the superiority of US-style capitalism within the Cold war structure. The US transferred its industries to South Korea in the form of loans and in return, South Korea received military aid and help building its infrastructure and was allowed some access to the US markets(Research Meeting on Unstable Labor, 2000). And to reduce expenditure, the US dragged Japan, which was experiencing an economic boom, into the bargain and South Korea, at the request of the US, normalized diplomatic ties with Japan in return for economic loans. The Park Chung-hee regime, acting on the advice of the IMF, started to set up prospects for investment(Lee Jae-hoon, 2000). In 1964, the foreign currency exchange was set up, doubling the value of the Korean currency. In 1965 interest regulation measures were set up and in 1967, South Korea became a member of GATT and adopted measures for free trade and the opening of the markets. In the 1970s, Masan was established as a free export zone and bestowed foreign investors with tax cuts and other benefits. Such structural basis allowed the entry of US and Japanese capital and led to the implementation of the export-oriented economic policy in South Korea.
During this period, the US, Japanese and other multi-national companies earned huge profits from their investments in Korea. Labor was cheap and little was spent on the welfare of the workers who worked long hours. Such exploitation was possible under the direct scrutiny of the South Korean government. Basic labor laws became non-existent and in 1970 a special law was passed preventing the formation of unions and union activity in foreign companies. Due to the characteristics of light industries, women occupied the majority of the work force. Women received less pay and faced more discrimination. Consequently, the Korean government played into the hands of foreign companies searching for cheaper labor. The Korean economy fell prey to the economic loans of the US and Japan. and South Korea became politically dependent on the US and Japan.
South Korea, from 1966 to 1969, saw rapid economic growth and became an important exporter in international markets while remaining dependent on the US and exploiting its workers.
(2) mid-1970s ∼ early 1980s (Heavy Industries)
In January 1973, the Korean government published its policy for boosting the heavy and chemical industries. Industrialization was taking place in many agricultural countries and South Korea needed a new strategy to overcome its emerging competitors. In addition, many of the heavy and chemical industries of developed countries were seeking to transfer their operations overseas. These countries were also starting to transfer over from heavy and chemical industries to high-tech or to the intellectual industries. They wanted to be free from the problems of labor shortage, land space, industrial pollution, etc, that came with heavy and chemical industries(Cho Hyung-jae, 1988). And so the transfer of the Korean industry to the heavy and chemical industry simply reflected the restructuring of developed countries. Korea received loans in return for receiving the transfer of the US heavy and chemical industries. However, despite the larger investment allocated to the heavy and chemical industries(four times more than the light industries), the government was soon faced with a decrease in demand in local and international markets. Heavy and chemical industries were on the decline after the severe speculation of 1977 & 78, when the economic recession began(Lee Jae-hoon, 1999).
South Korea, under the military regime, saw rapid economic growth for twenty years. However, the reliance on foreign loans led to the growth of corporations whose liabilities exceeded its assets, the marriage of business and the political sector, and the growth of an irrational financial sector.
2) 1980s ∼ early 1990s
The 1980s saw many changes in the world economy as well as the Korean economy. The world economy was in the midst of a depression following the two oil shocks of the 70s. The US, South Korea's largest importer, was no exception. The US budget deficit was worsening and its position weakened with Germany and Japan achieving the status of advanced countries. The US turned its attack on developing countries, especially South Korea and also Japan, for their protectionist trade policies. The US launched a new policy of neo-liberalism called Reaganomics under the pretext of efficiency and regulating the flow of the world economy. Such neo-liberal beliefs of market opening and free trade called for a new transformation in the Korean economy.
The new military regime, or the 5th Republic, unanimously adopted a policy of free trade in order to overcome the failure of the heavy and chemical industries and export decline of the 70s. Measures such as the privatization of local banks, opening of the financial sector, abolition of the law promoting individual industries and tax reform were undertaken to implement the structure of free trade. Industrial and trade policies were changed, imports increased and public enterprises privatized. However, these changes of free trade and deregulation were taking place only on the governmental level (Kim Sang-cho, 1997).
Industrial restructuring also took place in the 1980s led by the government and the financial sector. Until the 1970s, South Korea experienced rapid economic growth through the exports of low-priced mass-produced products with the help of low pay and long working hours(Lee Jae-hoon, 1999). However, in the 1980s it was difficult to expect similar results due to the emergence of cheaper labor in Southeast Asia and Latin America. Wages had increased in South Korea during the great 1987 labor struggles. The Ford-style of mass production was being transformed into smaller production of diverse products. Multi-national companies were pursuing openness and deregulation of the markets and were seeking to set up standards on free trade. The Korean economy had no choice but to undergo industrial restructuring from an export-oriented economy to a high-value earning economy. Many Korean companies took the opportunity of transferring their operations overseas (Southeast Asia, China, etc) in search of cheaper labor(Kim Kyung-hee, 1994).
Finally, foreign investments in South Korea increased from the mid 1980s. The US-dominated world economy was beginning to invest in multi-national companies and the stock market and from 1986 to 1989, South Korea with the "3 lows" (low price of oil, low dollar rate, low interest rate) in its favor, experienced a brief economic boom(Lee Jae-hoon, 1999). However, with increased investments by the multi-national companies in Asia, the US started pressuring Korea for market opening in order to protect its investments(Yoon Jin-ho, 2000). Multi-national investments increased rapidly in the financial sector and with the deregulation policies of the government, the entry of foreign banks into the local market accelerated. Heavy foreign investments were also seen in the stock market and with the easy entry of speculative capital, foreign investments in the stock market exceeded 60%. As can be seen, the transformation of the Korean economy in the 1980s with deregulation and openness would form the basis for the opening of the Korean market in the 1990s.
3) early 1990s ∼ 1997
Foreign capital investments in Korea accelerated in the early 1990s and Korean investments in overseas operations also increased sharply(Yoon Jin-ho, 2000). With the collapse of Communist Russia and Eastern Europe, the US concentrated its efforts in maximizing profits from its markets. The Uruguay Round of GATT was concluded and the World Trade Organization (WTO) launched. Pressure to open up the Korean markets and restrictions on Korean products such as dumping measures increased and the Korean government was compelled to speed up industrial restructuring. More and more companies were transferring their operations overseas and by the mid-90s, foreign investment exceeded local investment(Yoon Jin-ho, 2000). The government gave its full support to foreign investment despite the fact that such foreign transfers caused unemployment and decline in local investment. For the Kim Young-sam government, the question was whether Korea would progress into a developed country or remain a developing country.
Two main strategies were undertaken by the Korean government to strengthen national competitiveness - policy to strengthen the chaebols and a flexible labor policy. Under the rationale that bigger chaebols were needed to compete with transnational companies, the government abolished or reduced several related restrictions. The government also provided them with financial aid. In 1996, South Korea became a member of the OECD and as a result was compelled to open all sectors of the economy(financial, labor market, trade, etc). One key market opening was the short-term capital market which had the potential to cause economic unstability. Despite such inherent risks arising with OECD membership, the South Korean government was compelled by the strategies of the Korean capital market to become part of the bigger world capital market(Lee Jae-hoon, 1999). Korean capitalists felt threatened by the rapid growth of transnational capital and had to adopt measures to enter world markets. In addition, the globalization of production of transnational companies was becoming common in developed countries(Yoon Jin-ho, 2000). The flexible labor policy of the government was based on the theory of 'survival of the fittest' thought to be necessary for survival in the world markets and gave Korean companies more freedom in dealing with labor to react swiftly to the changes in the world markets.
To meet challenges in the flow of the world economy, the Korean economic strategy was based solely on the interests of the capitalists. With membership to the OECD, the inflow and outflow of short-term capital accelerated as never before. Speculative money entered the stock markets, Korean banks brought in foreign capital without discretion and many Korean companies set up overseas operations. All these things eventually led Korea to seek IMF funds at the end of 1997.
4) End of 1997 to the Present (post-IMF structure)
On December, 1997, South Korea accepted a loan of 550 billion dollars US from the IMF after its failure to repay short-term loans. The internal reasons of the foreign currency crisis were due to conglutination(the so-called the chronic disease of the Korean economy), irrational business expansion, over-lapping investments and heavy importation of short-term loans. However, the crises in Asia, especially in Indonesia and Thailand, had more direct reasons such as speculative capital.
Large amounts of foreign capital entered the Southeast Asian markets following the opening of the financial markets in the 1980s(Lee Ju-hee, 1998). Rumors had been rampant about a Korean economic crisis and the continuing bankruptcy of Korean corporations lowered the financial credibility of the country. The sudden exodus of foreign speculative capital finally led to the foreign currency crisis. Therefore, the economic crisis was not only due simply to internal reasons but also to the globalization policies of capitalists. This is also reflected in the restructuring programs of the government.
The restructuring program of the Korean government followed the instructions of the IMF. The main demands of the IMF concerned the liberalization of trade, capital and the financial sector based on the policy of neo-liberalism where external trade must be opened up and there must be complete liberalization of the capital/financial market. Such liberalization policies could be divided into direct foreign investment and liberalization of the capital/financial market. Direct foreign investments were expanded and M&As made possible. Rent was lowered and period of exemption was extended from 20 to 50 years. There were also benefits of tax cuts(Yoon Jin-ho, 2000). The capital and financial markets were liberalized and restrictions on the stock markets were lifted. Foreign ownership of Korean stocks reached 60 trillion won in 1999. The Korean stock exchange was at the mercy of the foreigners and corporate control was also being threatened(Maeil Economic Daily, February 6, 2000). Weak corporations and financial bodies were being closed down only to increase the stability of transnational investing.
The restructuring program of the government in this process is faced with the following problems: First, the restructuring program allows the free flow of US transnational capital, and so the complete liberalization of production and capital in the long run meant corporate control and control over the financial market subordinating the Korean economy with their interests(Yoon Jin-ho, 2000). The autonomy of the Korean economy is being weakened with the possibility of economic crisis.
Second, the restructuring program needs to be centered around the reform of chaebols due to the inefficiency and inequality of society caused by sole ownership and control of the corporate structure by the heads of the chaebols(Kang Byung-ku, 1997). However, chaebol reform has taken a back seat and the restructuring program has instead delegated more power to the chaebols.
Third, the government emphasized that the flexible labor policy is compulsory to raise corporate competitiveness and to lure foreign capital, but nothing has proven that the policy has been efficient(Cho Soon-kyung, 1998). The flexible labor policy has no connection with efficiency, any level of flexibility per se increases the value of a company. Therefore, the introduction of readjustment dismissals central to the flexible labor policy is an anti-labor policy oppressing the survival and basic labor rights of the workers(Kang Byung-ku, 1997).
Fourth, the discriminative nature of the restructuring program. Due to the anti-labor policy of the government, workers are being dismissed and made irregular or temporary. Wages have been decreased, unemployment is on the rise and survival threatened. Women workers who labeled as supplementary workers and not the breadwinners of a family, face double discrimination. This is also reflected in the employment policy of the government.
Fifth, expenses involved with restructuring are shouldered by the Korean people. The basic plan of the government was to cover expenses with the sale or the privatization of weak corporations, increase in revenue and decrease in expenses(Kim Sang-ku, 1999). According to a report released by the Korean Development Institute, the total cost to the government for five years of financial and corporate restructuring is estimated at 70 trillion won. However, without concrete taxation reform such as increasing direct or inheritance taxes, the government has no choice but to rely on taxes paid by the people. Therefore, workers are burdened with tax hikes as well as unstable employment and pay cuts.
As can be seen from the above, the Korean economy has been incorporated with the US-dominated world economy from the start of industrialization. The US, by taking advantage of the foreign currency crisis, has made the inflow and outflow of transnational capital possible and has demanded that the Korean government carry out a restructuring program designed to ensure its investment stability in the financial markets.
2. Labor Policy and Changes in Women's Labor Policy
South Korea's policy toward labor transpired predicated upon the interests of capital and the state. The 5-year economic plan of 1962 designed to develop South Korea's light industries, and the development of heavy chemical industries during the 70's, were sustained on minimal labor costs and the repression of workers' resistance. The great economic success that South Korea welcomed by the mid-1980's owes much to the state's enforcement of such policies. But as the world economy fell into recession and was confronted by the resistance of South Korean workers in the late 80's, it became increasingly difficult for the state to continue utilizing an economic model dependent on low wages. In this developing economic climate, the South Korean government began efforts to restructure its existing industrial complex and also to redirect current labor policies.
From the outset of industrialization in South Korea, the government used women as a cheap, manual, and often times conscripted labor force. This pattern continued past the initial development period and continued to serve as the basis for later policies. Accordingly, women represented a major sector of the cheap work force in the early stages of development, bearing the entire weight in labor intensive industries (e.g. textiles). Later during the economic restructuring period, South Korea's women laborers were ultimately pushed out of the labor market as they were the prime targets of changing hiring policies amidst industrial restructuring efforts. And post 1990, this group of women laborers were considered as a marginal work force, being subject to endless unemployment and temporary hiring practices, hence becoming a class of workers who's future seemed indefinite.
1) Before 1980
Shortly following General Park Jung-hee's successful coup d'etat on May 16th, 1960, Park's administration began development efforts geared toward building an export centered economy. Their first task was to tend to policies regulating labor. The Labor Relations Law was enacted in 1953, as well as the Labor Standard Law, the Labor Union Law, and the Labor Dispute Regulatory Law. These were referred to as the 4 Labor Laws and protected the right to organize. Deciding that these existing laws interfered with their economic goals, President Park and his administration attempted to reform the 4 Labor Laws and ultimately restrict the freedom of labor. Firstly, martial law was declared under the pretense that national security was being threatened by social unrest, and hundreds of union leaders were thereby imprisoned. A 1961 decree declared wages were to be frozen at the rate current to May 15th 1960 and that all labor disputes were hereby prohibited. From then on, newly created labor policies contained provisions restricting laborers' right to unionize and become heavily suppressive.
This became a vicious cycle. Exports were necessary to support the economic development plan dependent on foreign capital and also to pay off foreign debts and interests. Lacking in natural resources and technical skills, and with foreign debts building, the only comparative advantage that domestic export industries enjoyed was their abundant supply of cheap labor and fixed wage rates. Suppressive labor policies were hence essential in order to exploit domestic capital's only comparative advantage. In 1969, the government implemented a temporary exclusionary law for companies with foreign capital investments, in yet another attempt to suppress labor union activity and labor disputes. In order to quell the dissatisfaction of the workers, a slogan that read, "development before redistribution" was circulated to suggest that it was necessary to enlarge the economic pie before all were to enjoy in its riches.
Another way for Park Jung-hee's administration to suppress the labor movement was by popularizing the Saemaeul(New Village) Movement. The Saemaeul Movement was a comprehensive propaganda campaign created to influence not only the agricultural sector, but also persuade industrial workers and the business sector along the lines of the administration's economic goals. All this forced workers to arrive early and endure long hours, and also deteriorated the relationship between owner and laborer to one reminiscent of feudal subordination. The independent and democratic spirit of the workers was in effect controlled in this manner.
Despite the rapid increase in the number of women laborers from the start of industrialization in the 60s and into the 80s, the government did not put in place any policies that specifically applied to women. The protective articles contained within the Labor Standard Law is a good example of the government's attitude in this regard. The 1961 revision of the Labor Standard Law contained a general provision allowing women laborers paid maternity leaves for a period no less than 30 days. Specific guidelines regulating the enforcement or practical application of the maternity leave provision were not included until late 1969, but the more fundamental guidelines necessary in protecting women workers overall were yet to be established. Furthermore, this government was so intent on restricting the 3 Labor Rights (the right to unionize, the right to bargain, and the right to act as a union) that it pressed forward to stiffen the low wage structure targeting women laborers while not delivering on its provisions that were supposed to protect them. The obvious result was the further deterioration of the plight of all South Korean workers.
2) From 1980 to 1997
(1) 1980∼1992
Upon the assasination of Park Jung-hee and the subsequent end to his dictatorship, the demands for democracy by the masses grew more vehement. Yet under the following regime, the identical policies from the previous era continued to be applied. Further, the role of big business in affecting state policy grew more prominent as state and corporate interests began to work more closely together. This scenario continued to exist until the time of 1987's workers' mass uprising. Lasting for nearly twenty days, this massive movement of June 1987 was one in which five million participants turned out on a nation-wide scale to take part in the struggle. Students once again stepped to the forefront, joined by white collar workers, industrial laborers, farmers, urban small business owners, and so on. It was a mass struggle in which all types of people from all sectors of labor participated. Receiving the support of the populous, the goals of the struggle were to attain fundamental and universal democracy. Labor organizers rallied the collective energy of the participants and planned the national resistance for July and August. The workers' specific demands included the establishment of democratic trade unions, wage raises, and the overall improvement of labor conditions(Yi Ok-ji, 2000).
Due to the strong demands of the masses struggling for democratization, the administration of the 6th Republic(under Noh Tae-woo) could not employ the same types of coercive and restrictive policies of past regimes. Shifts in state policy can be seen in its policies on women laborers. By 1987, the state had established the Gender Equalization Employment Law, which was an attempt to mobilize female voters during the '87 presidential race. The law was a campaign promise put forth by Noh Tae-woo's party. Drafted hastily and implemented in December 1987, however, the Equalization Law had many limitations. It eventually underwent a comprehensive revision only about a year into its inception in 1989. Included in the revision were definitions of gender discrimination, provisions for fair wages across gender lines, a requirement making the employee responsible for the burden of proof in a dispute, and also procedural clarifications for government intervention in labor disputes. Penalties were also established for violations of gender discrimination laws and for those employers who do not provide the proscribed maternity or child-care leave.
This law was effective to a certain degree in curbing gender discrimination in the labor marketplace. In the financial industries, the traditional system of exclusively employing females in clerical positions was abolished. The hong-bong employee ranking system, which only applied to males, was made to apply to both genders. Forced early retirements due to marriage, pregnancy, giving birth, and succeeding early retirement practices slowly disappeared. Despite relative changes, the reality of gender discrimination in the workplace was not greatly improved. For example, in order to avoid abiding by the Gender Equalization Employment Law, industries began to introduce new forms of gender discrimination through new methods. The most representative example being the new human resource system. Inherent within the new human resource system were intentions to separate the work force along gender lines and to maintain female workers as a source of cheap labor. Such adapted practices were accepted or otherwise tolerated in passive fashion by the government and only led to increased gender inequalities, ultimately stabilizing what had for a brief moment been a relatively dynamic relationship between capital and labor. The government professed to due away with discriminatory employment practices through the Gender Equalization Employment Law in one respect, but at the same time, displayed contradicting motives in helping to secure capital's new tactics in deviating from the law.
With the collapse of socialism in 1990, developed capitalist states, centered around the U.S., demanded the opening of trade doors to developing states and altered global economic systems through the Uruguay Round, the WTO, and the Blue Round. In following the economic tides of the time, and by joining the UN and ILO in 1991, the South Korean government urged the development of flexible labor and reorganization of labor policies in those directions. In its revision of the Labor Standard Law in September 1991, the Ministry of Labor excluded part-time employees from receiving benefits such as the mandatory weekly day-off, annual personal leaves, women's leaves, pregnancy leaves, and others. As the proposed revisions were met with opposition from the organized labor movement and did not pass into legislation, in January 1992, the Ministry of Labor then successfully revised the Labor Standard Law by allotting private business the authority to create their own respective 'Adminstration Guides' specifying each companies guidelines on part-time laborers(Yun Jin-ho, 1996). Also, in order to reinforce national economic strength, the Ministry of Labor declared that it would be necessary to eliminate tension between labor and business. At the core of its proposed revisions to the Labor Standard Law were policies aimed at limiting wage increases and liberalizing the labor marketplace. More specifically, it targeted the dispatch work system, part-time labor policies, the relaxing of conditions of termination, and increased working hours. Nevertheless, this new initiative of the Ministry of Labor again failed to pass into legislation faced with resistance from the labor movement. Of the nearly 200,000 dispatch workers that existed illegally, a substantial number were already represented by women. The labor movement carried out active resistance out of concern that if the dispatch work system was legalized, then many more women would be exploited.
2) 1993 - 1996 (Beginnings of a Flexible Labor Market)
With the inauguration of Kim Young-sam in 1993, the Korean economy was showing signs of decline in its growth rate. Under fear and pressure of economic decline, the government adopted economic recovery as its primary goal. Consequently, this period saw the pursuit of policies for a flexible labor market which had already been underway under the neo-liberal policies of the previous administration. The Kim Young-sam administration announced its five-year plan (93-97) for a 'new economy' in 1993, bringing forth important changes in the structure of the labor market. As part of the new economy plan, the new labor force plan was meant to create a flexible labor market that would enable the labor force to 'adapt' to the structural changes in industries.
As pointed out earlier, Korean products manufactured through cheap wages had lost its competitiveness in the world market beginning in the late 1980s. Under these circumstances, the government began to see the need to boost national economic competitiveness in order to survive international competition by technological innovations and industrial restructuring. In order to accomplish this, the government claimed that it was necessary to boost the competitiveness of the industrial work force, which in effect was to make the labor market flexible. On the one hand, while expounding the 'flexibility of skills' to develop technical skills of the work force and technological advances, on the other hand, attempts were made to make the work force flexible by utilizing irregular workers to control the labor market. In effect, it was a strategy to divide unskilled low-age workers from the skilled work force thereby creating a dual structure in the labor market. In this process, a competitive technical work force would be nurtured and developed, while menial unskilled positions would be filled by irregular low-age workers, thereby enabling companies to decrease spending on wages. In order to implement this plan, the government passed several laws including the Standard Policy on Employment Act, Employment Insurance Act, Standard Job Training Act, Technical University Act, and the Employment Security Act, which created the systematic and legal conditions under which women and middle and older-aged workers would be recruited into the labor market as part of the irregular work force while developing the general work force.
Especially, the Standard Policy on Employment Act was passed in an attempt to solve the problem of labor shortage by recruiting the idle labor force. The act not only encouraged the employment of the elderly and the disabled, but focused on the use of the idle female labor force in temporary employment. In 1994, the government announced the Standard Plan on the Welfare of Women Workers, which was an unprecedented policy that dealt with women workers comprehensively for the first time, including employment, employment security, equality, welfare, and maternity. However, the contents of employment equality and security were meager, and it was clear that the intent was to utilize women as irregular workers. The part laying out the conditions for hourly work presupposed that they would be working mothers. According to the Standard Plan, obligations to family life and the physical limitations of women only allow them to work in irregular positions. This reveals the attitude that women's primary role is in the home and that she is responsible for the raising of children. Through irregular work systems and the 'protection' of household work, the Standard Plan assumes that women have complete responsibility for the family, and that the employment of women should be changed to insecure hourly work or work within the home(Kim Kyong-hee, 1994) The Standard Plan also includes policies for the regulation of the dispatch worker system and the protection of dispatch workers. While dispatch work was prohibited before, the new plan reveals the government's intentions to legalize dispatch work system especially as women fill those positions.
3) 1997 - 2000 Present (IMF and Labor Policy)
Inaugurated during the economic crisis, the Kim Dae-jung administration accepted the IMF-prescribed reforms in the public and labor sectors centering around financial reform, chaebol reform, and privatization. The labor policy at this time showed itself in the form of a flexible labor market, and the main agenda was the immediate introduction of massive layoffs and implementation of dispatch workers.
Layoffs were institutionalized in 1997 through the Standard Employment Act, Article 31, Paragraph 1 which states, "Employers wishing to lay off workers for management reasons must have an urgent management necessity for doing so." Thereafter in 1998, the revision of the same article added, "In such instances, the transfer, acquisition, or merger for the prevention of worsening of management shall be considered urgent management necessities." Moreover, getting rid of the former clause that postponed the implementation of the act for 2 years, the revision strengthened the possibility for immediate layoffs. The year 1998 also saw the enactment of the Temporary Workers Protection Act, completing the full realization of a flexible labor market. Massive unemployment and employment insecurity were the consequences. Under these circumstances, women workers were the most negatively affected group.
Meanwhile, after the economic crisis, government policy focused on unemployment. Massive unemployment made it impossible for the Kim Dae-jung administration not to deal with the problem. The unemployment policy at this time was mainly implemented through employment security, creation of jobs, job training, employment agencies, and unemployment benefits. However, women were excluded from such policies. The government's unemployment policy in effect thought of the unemployed as 'men'.
From the budget allotted for employment security, the amount allotted to women was only 1.9%. Moreover, projects for the creation of jobs such as public works, social overhead capital programs, and aid to start-up small and medium businesses were also geared towards men. Only public works were open to benefit women, but even then with limitations. Public works were created as one of the ways to immediately deal with massive layoffs that occurred under the IMF management of the economy. However, women were seriously limited in opportunities to participate in the public works projects. This was because the recipients of the projects were limited to the heads of households or the main bread winners, which in South Korea consists mainly of men, and consequently in the beginning only 32.3% of the participants were women. As a result of women's protests, eligibility requirements were relaxed and additional projects for women such as women's welfare assistants and after-school instructor positions were expanded. Consequently, women's participation increased to a little over 50%.
Women are excluded as recipients in other policies as well. Unemployment benefits, which are supposed to benefit all the unemployed, were heavily in favor of men. Out of a total of 8,082 cases making up 50.5 billion won, men made up 7,725 cases(95.6%) taking 48.5 billion won(96%), and women's cases numbered 357(4.4%) only taking 4% of the budget. The reason again is because eligibility is restricted to heads of households and/or primary income earners of the family. Generally, even when women are responsible for the livelihood of a family, if there is a husband living in the house, she is not legally considered the head of household nor the primary income earner. This serves as the main obstacle preventing women from receiving benefits.
Government policies that reflect bias towards men in seeing them as the only unemployed or the only ones responsible for the family, can also be seen in job training programs. Job training for women include beauty schools, cooking schools, baking classes, design schools, etc, which have traditionally been occupations held by women. They require a short learning period and simple skills, with little future prospect and relatively lower wages(Jang Ha-jin, 1998). This is consistent with the government policy that worked to incorporate the female labor force into the general labor market as a low-wage menial labor force. Such job training programs fail to take into consideration the demands in the labor market for such skills, and does not have provisions to find employment after training. Therefore, the program is unable to help those who are looking to find employment after the training.
III. The Economic Crisis of Korea and Women Workers
1. The Situation of Women Workers After
Industrialization
Industrial development in the 1960s increased the number of workers employed in factories as well as the percentage of manufacturing companies in relation to all other industries, especially the number of women workers. This was because economic growth and increases in exports were through the labor intensive industry and the companies preferred women workforce due to more stable and cheaper ones. Thus, the main industries employing women workers were the textile and garment industries from the 60s to the 70s. In 1964, over 60% of women workers in the manufacturing industry were concentrated in the textile and garment industry, and women workers made up 75% of all workers in textile and garment industry. This trend continued into the 70s, when the percentage of women workers in the textile and garment industries reached over 70% and the number of women workers in rubber and electronic & machinery industry also continuously grew. On the whole, women workers were working in labor-intensive industries such as large factories geared for export. The majority of these women were teenager workers and it can be assumed unmarried, the percentage of women in this industry who were aged between 17-24 was 86.7%.
Long working hours and low wages characterized the working conditions of these women workers. According to ILO statistics, the average number of work hours per week in Korea was 50.3 hours in 1960 and 57 hours in 1965. Although this number decreased to 54 hours in 1970, it was still the longest work week in the world. Wages were also extremely low. Of course, along with economic growth the average monthly salary increased from 15.2 dollars US(3,880 Korean won) in 1964 to 44.8 dollars US (14,150 won) in 1970. However, compared with wages in other countries it was still low. To earn the same amount as a Korean worker working 220 hours a month, an American worker needed to work only 13 hours. Women workers were payed less than male workers. In 1966, a woman worker working in Dong-il Textiles was payed 70 Korean won a day. Even working 30 days a month, the worker still only earned 2,100 won, which was only 54% of the average income in Korea(ILO statistics). Of course, it could be said that the low wages reflected the worker's young age and lack of experience. However, since the vast majority of women workers were young and lack of experience, there was no such standard.
The growth of production and exports in 1960s and the 1970s could be attributed to the sweat and blood of many women workers in the manufacturing sector. Especially the manufacturing industry, including textiles, footwear, electronics, etc. which employed many women workers, produced over 45% of all exported commodities in the latter half of the 70s(Lee Ok-ji et al, 2000).
In the early 80s, women's participation in the labor market continued to increase. The rate of economically active women increased from 42.8% in 1980, to 46.5% in 1989, and reached 47.3% in 1991. This is contrast to the decrease in the rate of economically active men in the same period, from 76.4%(1980), 73.3%(1989), to 74.7%(1991). The main area registering increases of economically active women was the manufacturing industry, particularly those sectors which mainly employed women such as textiles, footwear, and electronics. These three sectors particularly grew rapidly in employment and production despite the recession in the end of the 70s and the early 80s.
However, these three sectors experienced decline at the end of the 80s. Since the 80s, the appreciation of the Korean won relative to the US dollar, global trade protectionism, and intensified of competition between developing countries such as southeast Asia, China, etc. became a threat to Korean businesses which depended on the exports of labor-intensive commodities. The government changed the industrial structure to technology-intensive and capital-intensive industries, through industrial restructuring policies of rationalizing declining industries, recovering the competitiveness of growing industries, and encouraging high-technology industries. Capital responded to industrial restructuring by closing down in factories in labor-intensive, low-wage, and export-oriented manufacturing sector, and/or relocating production lines, subcontracting, automating, transferring to other sectors, or using irregular labor. Women workers were the most affected by industrial restructuring. In reality, from 1989 to 1993, the number of women workers in manufacturing jobs decreased to approximately 291,000. This reduction was the result of bankruptcies or shut-downs of textile or footwear factories, and the subcontracting of electronic companies. The industrial restructuring influenced women workers by strong intensification of labor, the marginalization of women's labor, the devaluation of women's skills, exclusion of women from skilled work, as well as unemployment.
Especially since the 90s, it is clear that the marginalization of women's labor was caused by increasing subcontracting and temporary employment. The fact that the women's labor force is becoming subcontracted illustrates the change of marital status of women workers in the manufacturing sector. The percentage of married women working in this sector greatly increased from 13% in 1981 to 42% in 1992. This percentage is higher than the average percentage of married women(37%) in all industries. Kim Kyung-hee(1994) asserts that this is due to increasing subcontracting within the manufacturing sector. That is, with the social trend of unmarried women preferring white collar jobs, married women are working in small factories near their homes or working as home-based workers. As a result, the rate of married women working in manufacturing overtook the rate of unmarried women. Temporary employment also radically increased in line with government labor market flexibility policy, particularly exploding after the economic crisis of 1997.
2. The Impact of the Economic Crisis on Women
Workers
As stated above, the Korean government tried to change its policies under the slogan of globalization until the mid 90s. Then, it experienced an economic crisis in the form of a foreign currency crisis at the end of 1997. Although there were disagreements on what caused the economic crisis in Korea, there was one point that all people agreed upon. The cause of the economic crisis in South Korean in 1997 was closely related to the policies, especially the open-door policy in the money market, which was pushed in the name of globalization. Accordingly, many Koreans associate the term globalization with the economic crisis. The policy of globalization in Korea and the resulting economic crisis, has had great effects on the lives of workers, especially women workers. The economic crisis as well as the labor market flexibility policy implemented in the name of increasing international competitive power quieted workers' resistance and gave impetus to restructuring, which was mainly a way to downsize workers. In this section, what happened in the female labor market with regard to the economic crisis, what kind of social and cultural pressure was used to accelerate this phenomenon, the impact on women workers, and how women workers coped, will be discussed.
1) Changes in the Female Labor Market
(1) Women Fired First
Unemployment was the greatest social problem faced immediately after the economic crisis gripped Korea at the end of 1997. This situation had greatest impact ever experienced in Korean history. The streets were full of unemployed workers and newspapers and broadcasting stations were daily reporting that unemployment was becoming a social problem.
Workers suffered from the highest rate of unemployment ever experienced in Korea, but only male workers were referred to as 'the unemployed.' Although women were one of the groups that suffered the most from unemployment, no one paid attention to their situation. Statistically, however, the unemployment rate of women was lower than that of men. In the first quarter of 1999, which recorded the highest rate of unemployment, the male unemployment rate was 9.3%, and that of women was 7.0%(see Table 1). A closer examine of the situation reveals that these statistics do not show the real suffering of women workers.
Table 1. Unemployment Rate by Gender
Unit: thousands (%)
Table 2 compares the number of employed by gender before and after the economic crisis. Table 2 shows that the rate of female workers' employment decreased to 6.6%, which is much higher than that of male workers' employment (4.6%). Despite this fact, the lower unemployment rate of women versus men means that female workers were excluded from the labor market.
<Table 2> Changes in the Number of Employed by Gender
Unit: thousands, %
The fact that the percentage of the non-economically active female population has increased to 7.1% in January 1998 from 2.6% in November 1997(compared to November 1996), reflects that female workers were excluded from the labor market. Despite the fact that the number of employed women workers has greatly decreased, statistics regarded these women as the "non-economically active population." Resulting from this fault in statistics, these unemployed women were not calculated in the unemployment rate. Women workers who were excluded from the labor market should be regarded as discouraged unemployed, considering that no employee quit their job voluntarily, and the women dismissed are looking for jobs because of worries about their economic situation in the recession.
Women were laid off from their jobs in various ways. After the economic crisis, business companies including public enterprises began restructuring, mainly focusing on downsizing, and the weakest group was made the target. Women workers were largely made the target, especially in workplaces mainly occupied by women workers(Cho Soon-kyung, 1998). Methods of downsizing included firing women first and/or removing women-concentrated departments or jobs. These kinds of layoffs occurred when women were mainly concentrated in low-level jobs such as clerical jobs including word processing and accounting. Company owners rationalized their reduction of employees with the logic that they no longer needed the simple duties of clerical workers. In addition, company owners used this rationalization to reduce one person(mainly women) among a couple working in the same company. The number of cases of employers dismissing employees because of marriage or pregnancy have grown. According to the 'Equality Hotline' of the KWWAU, counseling cases received in 1999 relating to maternal leave has risen to three times that of 1998, which reflected the illegal employment practices such as dismissals because of pregnancy and childbirth. This reflects the regression of maternal protection under the pretence of the economic crisis. Therefore, gains made by women workers struggles over the past 10 years have been in vain. Women who were fired and tried to enter the labor market after the economic crisis composed the cheap labor pool. Especially middle-aged women were in the worst situation when they were fired, as they had difficulty in finding jobs anywhere. Unemployed middle-aged women who registered at the Action Center for Unemployment Women of KWWAU in 1999 showed their willingness to work anywhere. According to an analysis on the characteristics of unemployed women in their forties and sixties seeking employment(Park Jin-young, 1999b), there was 100,000 won gap between wages they are willing to receive and wages they received before dismissal. Because of difficulties seeking employment, they were willing to endure 'downward employment,' and many women are underemployed. The western study that women are fired first in an economic crisis, play a safety valve role, and compose the industrial reserve army, can also be applied in Korea.
(2) The Irregular Employment of Women Workers
The most striking aspect of the structure of women's employment is irregular employment. As of June 2000, only 47.1% of all employed workers have 'permanent employment.' temporary employees with an employment contract of less than one year plus day laborers with an employment contract of less than one month comprise 52.1% of all employed workers. In particular, only 29.8% of all employed women workers can be described as "permanently employed" while 46.2% of women workers are employed by a temporary, and an additional 24.0% are day laborers (refer to Table 3).
Table 3: Employment Status by Gender(June, 2000)
Unit; 1000 workers (%)
The irregular status of employment of women workers is not an issue that suddenly descended out of the blue. Rather, from the early 1990s, the push for work flexibility included the strategy of steadily increasing the numbers of irregular workers. However, with the economic crisis, the pace of creating irregular jobs rapidly accelerated. According to a survey conducted by the Korea Labor Institute (KLI), 92% of those newly employed in early 1999 were workers with temporary employment and day laborers. This was when the irregular employment status of women workers became readily apparent, as is best shown in the table below. Table 4 shows the relationship between diffusion of the temporary employment form and overall employment change.
Table 4: Gender Composition of Changes in temporary Employment
Unit: %
Between 1990 and 1997, employed workforce grew by 3.0% a year on average, but 47.5% of that 3.0% growth in employed workers can be accounted for by the expansion of temporary employment. Categorizing by gender, in the same time period, 61.2% of the increase in employment of women workers was in irregular forms of employment. In stark contrast, the corresponding percentage for men was only 36.9%. During the economic crisis between 1997 and 1998, total employment shrunk by 7.8%, and the contraction of employment affected mainly "permanent employment." However, the impact on women was greater as employment of male workers decreased at a rate of 3.0%, whereas employment of women workers decreased by 15.4%. Looking at the content of the work that was eliminated, 94.6% of the male employment decrease was temporary male workers whereas the 83.3% of the decrease in women's employment was permanent employment. Thus, from 1990 to 1997, the increase in male employment was mainly permanent employment while the increase in women's employment was mainly temporary work. Furthermore, during the years of sharply increasing unemployment rates, 1997-1998, the decrease in male employment was mainly the temporary portion whereas the decrease in women's employment was mainly erosion of women's permanent employment. To summarize, when total employment increases, women become employed on a temporary basis, and during times of redundancy dismissal (layoff), women with permanent employment are dismissed, and the main target of the 1998 restructuring/downsizing drive was elimination of jobs held by women.
On the one hand, this phenomenon of creating irregular women's employment is not localized to just one social stratum or class of women; rather, the evidence indicates that it is becoming the dominant employment structure for all women. Table 5 shows the relative proportions of permanent employment, temporary employment, and day labor by educational attainment. The proportion of temporary employment and day laborer status among all workers tends to increase the lower the educational level. temporary employment and day labor for university graduates stands at 14.1%, for high school graduates 31.0%, for middle school graduates 46.0%, and for those with less than a middle school education, the rate is 70.8%. Thus, the observed phenomenon is the proportion of temporary and day laborer employment increases with decreasing educational attainment. However, for women, 31.1% of women university graduates are in temporary employment or day labor, with the corresponding percentages 43.1% for high school women graduates, 58.9% for middle school women graduates, and 81.2% for women with less than a middle school education. Thus, the statistics tell us that the lower the educational level and if one is a woman, the harder it is to obtain relatively more secure jobs that last over one year. For both men and women with less than a middle school education, it is more difficult to secure permanent employment, and the reality for women is that, even if one does have a university diploma, 31.1% will end up in irregular employment. If we examine the statistics for men's employment in permanent jobs, 91.5% of male university graduates secure permanent employment and 77.2% of male high school graduates attain permanent employment, thereby forming a striking contrast to the reality faced by women workers(Kwon, Hye-ja, 1999). Categorizing employment type by educational attainment, the following table shows that for a woman worker, even though she may have high educational attainment, gaining admission into the ranks of the permanent-employed is no easy feat.
Table 5: Employment Status by Gender and Educational Level
Unit: 1000 persons, %
Kwon Hae-ja (1999) writes that according to the raw data published by the Dept of Statistics in 1997 on economic activity, the irregular work and day-employment status of men and women were contrastingly different. The irregular work and day labor status of men were based on low education. The full-time employment rate was high of men between that ages of 25 and 50 years of age, the irregular working rate was the highest between the ages of 15 and 24, when men tended to be in school or the military and over 60 years of age. The temporary-day employment rate was as follows: 70.3% were employed as simple menial labor, 59.7% in services and sales, and 58.6% were mechanics. Men with low education and middle-aged worked as temporary or day laborers in areas requiring little skill.
However, for women, education and age has no influence on irregular or day labor. Women worked as irregular labor in all areas of occupation, making up 46.8% of professionals or semi-professionals, 34.8% of all office workers, 86.3% of sales or services, 73.5% of skilled labor, 34.5% of machine operators or assembly workers and 85% of simple menial jobs. With the economic recovery, temporary jobs of less than one month increased sharply. In 1999, the increased temporary employment rate of women was reflected in all age levels and on the educational level, the increase was most obvious among women with more than high school education. The increase was highest in the financial and the public sectors as well as wholesale and retail sectors. Unlike the past, this increase was also noticeable in the offices and semi-professional work. The irregular working status of women transcended age, education and type of occupation.
Table 6 shows the status of women workers in their mode of occupation. Women occupy only 39%∼40% of the workforce. The rate of full-time workers fluctuated from 27.8% in 1996 to 24.9% in 1998. There was a sharp decrease in full-time employment of women from 1997 at the onset of the economic crisis to 1998. Temporary contracted work of less than a year also declined. Only temporary contracted work of less than a month increased.
Table 6 : Status of Women Workers
This phenomenon illustrates the dismissal of full-time women workers and that any new openings for women were merely irregular work. Cho Soon-kyung (1999) analyzing new openings in 17 banks and financial organizations in 1999 writes that only 10.8% of the newly employed were given full-time positions and the rate of full-time women workers came to 27.2%. 90% of the newly employed were on a temporary basis and out of this, 82% were women workers(see Table 7).
Table 7 : Employment Rate in Banks and Financial
Organizations in 1999
(March 1999, unit: persons, %)
There were many cases where full-time women workers were dismissed only to be replaced by irregular women workers, especially in the financial and clerical sectors.
In addition to short-term contracts, women are also indirectly employed through dispatch labor agencies. There are estimated to be about five to six hundred thousand dispatch laborers and about 53,218 workers were employed by dispatch labor agencies approved by the Dept of Labor. This shows that most of the dispatch labor agencies were illegal. It is difficult to estimate the exact number of dispatch women workers. However, since dispatch labor can be used in jobs normally undertaken by women, it is possible to estimate that women make up the majority of dispatch labor. According to women labor organizations, women workers received about 60% to 70% of full time pay. There were also cases where a women worker would be dismissed and then rehired to her former position as a dispatch worker, showing the worsening conditions of employment for women workers.
Other forms of temporary work are arising such as consignment labor contracts and a special form of employment where a group of workers are registered under a private company and a special employment relation is established. Despite the fact that this special employment relation is that of an employer-employee relationship, the actual contract signed is either a civil proxy contract or a subcontract. These contracts violate the basic labor laws and other labor-related laws. Tele-marketers, insurance sales personnel, etc, are in such employment conditions. About one million people are estimated to be in special employment relations but the exact figures are not known. This special employment relation is being expanded to areas concentrated with women workers and this type of employment is expected to increase steadily in the near future.
(3) Aggravation of Labor Conditions
The increase in the number of irregular workers means that employment conditions are also being aggravated. In Korea, irregular workers are employed for economic reasons(Kim Tae-hong 1999) and due to the simplicity of the work. For the same work, companies pay irregular workers less than regular workers. A worker faces a very different labor situation when reemployed as a irregular worker at the same workplace. In the financial sector, it is reported that retired regular workers face the same amount of work when reemployed as part-timers or irregular workers, but the average wage of the irregular workers was 790,000 won, or 41% of regular workers at 1,980,000 won. As some cases have shown, the lowest wage is 23.3% of regular workers(700,000 won out of 3,000,000 won) and the highest recorded at 83.3%(750,000 won out of 900,000 won)(Cho Soon-kyung 1999).
This inequality is more clearly reflected when the wages between regular workers and irregular workers who do similar work with the same academic backgrounds are compared. According to a report surveying the financial sector, wholesale, retail, culinary, hotel, hospitals and manufacturing business sectors with high rates of irregular workers, irregular wages compared with the wages of regular workers were 49.8% for part-time workers, 67.1% for irregular workers and 73.3% for dispatched workers(Kim, Tae-hung, 1999).
Table 8 : Wages and Work Hours of Regular and Irregular Workers
The purpose of employing irregular workers to cut labor costs is revealed more clearly when comparing the working hours between the part-time and regular workers. As shown in the above report, part-time workers have to work the same or longer working hours than full-time workers in 46.9% of the companies which employ part-time workers. Most part-time workers face discrimination in treatment and position although there is no difference in working hours from regular workers.
The discrimination is not limited only to wages. Irregular workers are discriminated or excluded from vacation and welfare benefits, and eligibility to the four social insurances. A survey by a branch of the KWWAU in 1999 shows irregular workers have less access than regular workers to monthly, yearly and maternity leave. The policy-holding rate of social insurances such as the national pension, national medical insurance and employment insurance is also much lower than that of regular workers. While more than 50% of regular workers answered that they held policies in these three social insurances, 16.6% of irregular workers answered that they held national pension policies, 17.9% to the national medical insurance, and 25.2% to the employment insurance. (Park Jin-yung, 1999a)
The economic crisis aggravated not only the lives of regular workers but also the lives of all workers. The labor conditions of the women workers became unbearable. Work became more intense and there were pay cuts, delays in payment and reduction in welfare benefits. According to the Dept of Statistics, wages were reduced by 2.5% but this meant a deduction of 9.3% considering the rise in prices at the same time.
As business recovers, wages have been rising to t | | |
