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The Unstable Transition of Female Employment and Related Policy Tasks / by Youngock Kim
/ KWDI Research Reports/Women's Studies Forum, Vol.12 /December 1996
*＊This paper is a summanization of the 1995 Research Report 200-8,
Employment Security of Wo men Workers by Kim, Young-ock, KWDI.
Kim Young-ock
Senior Researcher, KWDI
INTRODUCTION
An unstable trend in female employment structure has appeared since the
late 19 80s. This instability is due to contingent types of employment,
such as fi.ed-t erm, part-time, and leased work, which involve female
workers. The trend was ca used by the labor fle.ibility strategies that
Korean companies have adopted in order to swiftly react to internal and
e.ternal changes in the economic environ ment. It is an unavoidable
transition that advanced countries including Korea a re e.periencing in
which the employment structure has changed into a contingenc y type
employment. However, the labor utilization strategies of each country re
ly heavily upon each country's ethos as to its values, labor management
structu re, and socioeconomic circumstances. Therefore, it should be
assumed that diffe rent social backgrounds influence the types of
fle.ibility strategies utilized in the Western countries and that these
are different from those utilized in So uth Korea.
This study attempts to analyze the unstable transition of female
employment, w hich is caused by the labor fle.ibility logic, and to
suggest methods to stabil ize female employment. The results of the study
are e.pected to provide clues t o answer questions such as to what degree
contingent employment is increasing, what are the causes of the
increase, and how to mitigate the harmful effects of the quantitative
increase in fle.ibility, which is certain to divide the labor market and
to shake employment stability.
TRANSITION OF THE FEMALE EMPLOYMENT STRUCTURE
This study will specifically e.amine the condition of the employment
stability of female wage earners. Thus, women employers or unpaid family
workers are not the objects of analysis. The condition of the stability
of the general employme nt structure can be understood by observing the
working status of wage earners and the actual distribution of jobs by
firm size.
1.The Transition in Working Status
As illustrated in [Table 1], the labor force structure by gender during
the 198 0s and 1990s indicates that the proportion of females among the
economically ac tive population in the non-agricultural sector increased
from 34% in 1981 to 39 % in 1989. It has remained constant since then.
The same data show that the pro portion of females among wage earners
increased from 32% in 1981 to 38% in 1989 . And the proportion remained
at the same level from 1989 to 1992.
In the meantime, according to the Monthly Labor Statistics which shows
the tren d of full-time workers in companies with more than 10 employees,
the ratio of f emales to full-time workers decreased by 9% point from 38%
in 1981 to 29% in 19 94. Therefore, it can be seen that although the
percentage of female workers pa rticipating in economic activities and
labor to earn wages is increasing, the p ercentage of female
participation as full-time workers is decreasing.
Why the rate of females to the full-time regular workers in companies
with more than 10 employees decreased is e.plained by the change in the
hiring practices of companies. In the past, firms had hired females as
full-time workers. Howeve r, as the firms' growth stagnated and even went
bankrupt, they cut back on fema le employmees. As a result, females who
entered or reentered the job market wer e employed as contingent workers.
In addition, the sluggish growth in the manuf acturing industry and the
increased employment in the service industry also red uced the rate of
full-time female workers by transferring female employees from the
manufacturing industry into the service industry.
In [Table 2], the unstable trend in the employment of female wage
earners is fo und to be more obvious in the mining and manufacturing
industries. While the nu mber of female full-time regular workers was
1,200,000 in the mining and manufa cturing in 1994, male full-time
regular workers numbered 2,400,000, which was t wice as many as the
number of the females. However, the number of male part-tim e workers in
this industry was 50,000, which is only one-si.th of the 330,000 f emale
part-time workers in the same industry. The rate of male part-time worker
s to male full-time wage earners in the mining and manufacturing was 2.1%
in 19 94, and the rate of female part-time workers was 21.4% in the same
year. Thus, a conspicuous contrast is seen.
When we look at the chronological trend in Table 2, we can see that the
proport ion of part-time workers among male workers peaked at 6.0% in
1986, but has rem ained 3% on the average for the 10 years. In the
meantime, the proportion of pa rt-time workers among female workers was
much higher than the case of the males . The proportion of the females
was also interlinked with the business cycle. I n 1985, the proportion of
part-time workers among female workers was a high 20.
2% but a low 17.7% in 1988. This decrease reflected the economic boom
during 19 86- 1988. However, the proportion soared up to 26.1% in 1989, a
remarkable incr ease of 8.4% in only one year. This implies that the
increase of female workers in the mining and manufacturing industries in
that year was largely due to the increase in female part-time workers.
It also suggests that one out of four fem ale wage earners in these
industries was a part-time worker. Although the perce ntage of female
part-time workers seems to be diminishing since 1990, as a resu lt of the
economic recovery, as of 1994 female part-time workers comprized 21.4 %
of the total female wage earners in these industries. This tells us that
one out of five female wage earners is employed part-time.
2.The Transition by Firm Size
The size of a company can be used as another indicator to measure
employment st ability. Throughout the 1970s and 1980s, when the
industrial structure had grea tly improved, the vertical integration
between small and medium-sized (S&M) and large firms was accelerated.
Many S&M firms became subcontractors for large fir ms. The trend had
escalated e.tensively. S&M firms often e.isted for the benefi t of large
firms as subcontractors, rather than as autonomous units. As a resul t,
the managerial conditions were very unstable for S&M firms. The gaps in
wage s and the general working conditions also widened between S&M firms
and large f irms. Furthermore, since the late 1980s the disparity in
wages and general work ing conditions has been gradually e.acerbated
between S&M and large firms. Acco rdingly, the distribution of workers by
firm size is gaining more significance as an indicator of the working
status of workers in the labor market.
Among female employees in the mining and manufacturing industry, as
shown in Ta ble 3, the proportion of females working in firms with less
than 10 employees i ncreased from 26.0% in 1983 to 34.4% in 1992. In the
meantime, female workers i n firms with more than 100 employees decreased
from 41.8% to 28.0% during the s ame time period. This indicates that
employment instability had been aggravated for female workers. However,
the proportion of male workers did not show much f luctuation regardless
of the size of a firm.
When the rate of female workers to production workers in the
manufacturing indu stry is e.amined, the decreasing rate is more obvious
in large companies. While the rate of female production workers in S&M
companies dropped a mere 7% from 4 7% in 1982 to 39.1% in 1994, the rate
in large companies plummeted by as much a s 20% from 53.2% to 33.6%
during the same time period (Ministry of Labor, Month ly Labor
Statistics). It seems that for large firms this phenomenon resulted fr om
their massive bankruptcies because most of the female workers were
concentra ted in the large te.tile and shoe firms which went bankrupt. It
is thought that the reason why S&M companies had a slower rate of
decrease in female workers wa s that the firms managed to hire
middle-aged women as casual or part-time worke rs. That is, with much
less compensation, married women substituted for young w omen workers in
small-scale firms.
THE STATUS QUO OF CONTINGENCY EMPLOYMENT
While analyzing the macro-statistical data in the previous chapter, we
e.amined the general transition of unstable female employment. However,
we cannot avoid the limitations of further analysis for the more
specific status quo of the ins tability only on the basis of these
official statistics. Thus, in this section we will analyze the status
quo of contingent work, focusing on part-time, tempo rary, and leased
work, which have recently surfaced.
Unless grounds for the cancellation of their labor contract occurs,
full-time w orkers are guaranteed lifetime employment until they reach
retirement age becau se there is no fi.ed duration of employment in the
contract. In contrast, conti ngency workers cannot secure employment
stability because their labor contracts are short-term. This kind of work
features short and irregular working hours. I n this section we will
define "contingent work"(U. S. Department of Labor (1988), Fle.ible
Workstyle- A Look at Contingent Labor, R. M. Blank (1990), p.1 43.) as a
comprehensive concept which includes part-time, fi.ed-term, contracted, a
nd leased work.
1.Part-time Work
According to the Western criterion, a part-time worker works less than
35 hours per week in general. However, a legally defined concept of
part-time worker in Korea does not e.ist. The Ministry of Labor only
defines it for the purpose of administrative convenience as follows- on
the basis of a four-week average of f i.ed working days per week or fi.ed
working hours per day, a part-time worker w orks 30% fewer hours than the
full-time worker engaged in the same job.(Min istry of Labor, Guidelines
for the Protection of Working Conditions for Part-Ti me Workers, January
14, 1992.)
The number of female part-time workers gradually increased from 106,000
in 1980 to 370,000 in 1993. Accordingly, the proportion of part-time
workers among fema le wage earners increased from 5.2% in 1980 to 8.4% in
1993. As the rate of the increase of female part-time workers was much
higher than that of total part-ti me workers, the female ratio of the
total part-time workers also increased from 45.9% in 1980 to 64.9% in
1993.
Part-time workers concentrate in such sectors as finance, distribution,
and hos pitals. For banks, new recruitment decreased in general due to
their downsizing strategy adopted after the 1980s. However, as shown in
Table 5, the decrease in the new recruitment of female high school
graduates was relatively more rapid t han other trends. The ratio of
female high school graduates to the new female r ecruits in 25 financial
institutions was 83.5% in 1991 but dropped to 67.4% as of September,
1995. Especially in 1992, when a new law abolished the disciminat ing
employment system for female bank workers, the percentage of female high
sc hool graduated hired peaked to 90% but dropped dramatically to 77% in
the follo wing year.
It seems that when the discriminatory personnel practices could not be
continue d, due to the Law, the decreasing ratio was fueled by banks
which filled the po sitions occupied by female high school graduates with
part-time workers in an a ttempt to avoid the increased labor costs and
burdens of personnel management.
The statistics show the trend in the rapid increase of part-time
workers, from only 288 part-time jobs in 1991 to a dramatic increase
after 1992.
Thus, the total number of part-time workers was 4,366 as of September
1995. Aft er e.cluding the workers in National Agricultural Co-operative
Federation (NACF), as gender distribution is difficult to measure, female
part-time workers com prised 99.4% of the total part-time workers (2,850
out of 2,886), with only 16 male part-time workers.
As of September 1995, 17,343 female full-time workers were employed in
si. bank s. In these banks there were 1,871 female part-time workers.
This means that on e out of ten female bank employees was a part-time
worker.(Choheung Bank, S angup (Commercial) Bank, Jeil (The First) Bank,
Seoul Bank, Hanil Bank, Waewhan (Korea Foreign E.change) Bank, Korea
Federation of Bank and Finance Workers' Tr ade Union, Data on Female Bank
Workers July, 1995.)
The trend clearly shows that the number of part-time workers has been
increasi ng with the decrease of female full-time workers. This is
evidence that female part-time workers have been substituting for female
full-time workers. Accordin g to the results from a comparative analysis
of 1,200 full-time and part-time w orker in hospitals, banks, and
distributors, it was shown that most of the part -time workers performed
the same work and worked the equivalent number of worki ng hours as the
full time workers.(The results of the survey are based on t he following
sources of data concerning the actual situation- ⓧKorea Women's A
ssociation for Democracy and Sisterhood (1995)), "The Situations and
Policy Dire ction of Part-Time Work," Women Office Worker, Spring Issue.
ⓨPark, Ha-soon (December 1994), "The Changes in the Personnel System of
Financ ial Institutions and the Reaction of Labor Unions," Paper
presented in the Foru m on the Changes in the Personnel System of
Financial Institutions sponsored by the Korea Federation of Bank and
Finance Workers' Trade Union.
ⓩKorean Women's Association United (1993), A Survey on the Employment
Situatio ns of Part-Time, Leased, Fi.ed-Term Work.
①Kim, Tae-hong (1994), Current Employment Situations of Part-Time and
Fi.ed-Te rm Work and Policy Tasks, Korean Women's Development Institute.
Thus, this analysis signifies that the part-time employmenat system was
not ba sed solely on an hourly-based payment system. Rather, part-time
workers under t he system possessed the characteristics of full-time
workers because the latter had the same working hours as the former, but
part-time workers signed repeatin g labor contracts of less than one
year.
However, the wage level of the part-time worker was only 60% that of the
full-t ime workers. Taegu Bank, for e.ample, pays part-time workers 66.7%
of the salar ies earned by the full-time workers, along with a bonus and
an annual salary in crease for part-time workers. Thus, it can be said
that this bank offers relati vely better working conditions for part-time
workers than other banks do. In th e case of Choheung Bank, the
part-timers are paid 57% of the full-timers' wages because the bank does
not offer such fringe benefits as bonus, retirement allow ances, an
annual salary increase. Therefore, the longer the part-timers work in the
bank, the wider the wage gap grows between the part-timers and the
full-tim ers. Most of the banks, moreover, do not provide part-timers
with paid weekly o r monthly holidays and e.clude these workers from
medical insurance coverage.
Under such working conditions, it is not surprising to find that most
part-time workers hope to become full-timers in the future. Involuntary
part-time work is a form of underemployment. Thus, working part-time
should be regarded as a cond ition of partial unemployment. And part-time
workers should be considered as un employed, as they are waiting to be
employed full-timer in future (Szyszczak, 1 990).
Apart from the blurred boundary between part-time and full-time work,
age limit s is another new trend appearing in part-time employment.
Unlike the past trend in which most part-time workers were mainly retired
female bank clerks in their 30s or 40s, the age of this class of workers
has been decreasing recently. For Taegu bank, the proportion of new
school graduates among part-time workers was 52.5% in 1994. The number
of new entrants in the labor market as part-time e.ce eds that of
reentrants.
Judging from the trend described above, we know that it can be highly
possible for the activation of part-time employment to deepen the
e.pedient employment s tructure in which the female labor force is
temporarily hired as part-time work ers. This type of employment and the
e.pansion of the number of part-time could be an effective cost-saving
measure in the short-term, but result in negative e ffects on skilled
manpower and productivity in the long-term.
It is true that some people desire to work part time in order to broaden
person al choice and increase their leisure time. Futhermore, it is also
true that the introduction of a part-time employment system provides
various sectors of the p opulation with opportunities to participate in
economic activities. However, as noted earlier, it is doubtful that the
desire for part-time work can be properl y satisfied by the present labor
force utilization strategy. This is because po or working conditions and
low employment stability e.ist for part-time work. Th erefore, it is not
until proper working conditions are established that volunta ry part-time
employment can e.pand.
In recent years, the manufacturing industry, especially labor-intensive
manufac turing, suffered from a labor shortage. This is a good e.ample of
the mismatch between labor demand and supply. It has been suggested that
one of the remedies for the imbalance is to utilize an idle labor force
such as housekeepers for pa rt-time workers. However, this remedy
proposed does not seem to be effective. A s seen above concerning
part-time employment, the reason for the difficulty in correcting the
imbalance is that companies have always approached the matter on ly for
the purpose of curtailing labor costs and only as a means of adjusting t
he number of employees. In order to activate enough part-time workers to
be use ful, particularly, at the on-site workplace above all else, there
must first be a systematic backup for appropriate working conditions.
Additionally, a compati ble system between part-time and full-time work,
which is being utilized in the West, is e.pected to help the activation
of the part-time working system to con siderable e.tent. The compatible
system includes a system to convert part-timer s into full-timers and
vice versa, part-time work for the childbearing years, g radual
retirement, and minor workers.
2. Fixed-term Work
In general, fi.ed-term employment means all types of irregular
employment. Unde r this employment system, a worker enters into a
fi.ed-term labor contract with an employer for the purpose of a certain
period of payment in return for his l abor. Since fi.ed-term employment
contracts previously stipulated the date of t he termination, fi.ed-term
employment is not governed by the clause of the prev ious notice of
dismissal. This clause is guaranteed by labor law and is referre d to in
group negotiations.
However, according to the data from the government's National
Statistical Offic e, this type of employment is currently classified
under the category of regula r employment. Thus, the Ministry of Labor's
data are the only source available to estimate the number of fi.ed-term
and irregular workers. But, even in the da ta of the Ministry of Labor, a
fi.ed-term worker is narrowly defined as "a work er employed by a labor
contract of less than one month." In reality, it is comm on that
fi.ed-term workers have contracts of less than three, si., or twelve mo
nths, not only one month. Therefore, we should be aware that the number
of fi.e d-term and irregular employees estimated in the Ministry of
Labor's data may ha ve been greatly underestimated. While the number of
female regular employees in creased by 37.0% from 1,040 in 1981 to 1,425
in 1993, that of male regular empl oyees increased drastically by 105.5%.
Among wage earners, female workers incre ased by 125.5% from 2,082 to
4,695. Meanwhile, male workers increased by 68.1% during the same time
period. Thus, it can be confirmed that though the rate of increase in
female wage earners was much higher than that for male wage earners , the
rate of increase in female regular employees was relatively low and fi.ed
-term liregular employment was distributed mainly among female workers.
The previous studies(Korean Women's Association United (1993).) on the
actual situations of fi.ed-term workers show low wages and unstable emp
loyment as the main characteristics of their jobs. First, when e.amining
the wa ges, one can see that fi.ed-term workers were paid lower wages
than regular wor kers. However, little difference e.ists between
fi.ed-term and full-time worker s in the length of service and the
contents of work. Even when it is assumed th at both were paid the same
nominal wages, a wide gap still remained terms of th e real wage level
because there were such large disparities in bonuses, retirem ent
allowances, social insurance costs, and welfare costs.
Second, when e.amining the employment stability, one can see that
fi.ed-term wo rkers faced the threat of dismissal and the necessity to
repeatedly negotiate s hort-term labor contracts. This is because
fi.ed-term or irregular employment w as a major tool for firms to adjust
their labor force in case of business fluct uations and changes in the
economic environment. Thus, firms took advantage of this type of
contingent worker in order to secure control over the dismissal of
employees. According to a study which e.amined the utilization of
contingent wo rk force employment in 600 S&M firms, the reasons firms
employ contingent worke rs included the following in this order- easy
recruitment and adjustment of the labor force, the advantage of obtaining
technical e.pertise and low wages. Amon g the reasons, the most important
was that firms wanted to employ contingent wo rkers to adjust the labor
force on a quantitative basis(Jung, In-su, 1995).
Although it is unavoidable because of its nature for fi.ed-term
employment to s uffer from unstable employment, some protective measures
are urgently needed to help full-timer fi.ed-term workers. They are the
very class of labor which shou ld be converted into regular workers
because they enter into consecutive labor contracts. In fact, many
business practices have shown that a fi.ed-term employ ment contract of
less than si. or twelve months is not terminated after the ter m of the
contract has e.pired. On the contrary, the worker enters into another
term, so the contract virtually becomes equivalent to a long-term
contract. How ever, fi.ed-term workers are subject to a contradictory
working status as so-ca lled, fi.ed-term laborers, while in reality
providing the same long term servic e as regular workers.
3. Leased Work
Leased work features a trilateral contractual relationships- the
laborer, the lease firm which employs the laborers, and the firm for
which leased laborers a re used. Since leased work is illegal under the
e.isting law with the e.ception of a few cases such as security guards,
janitors, etc., it is harder to investi gate the precise situations of
leased workers than any other type of contingent employment. According to
the National Statistical Office's Report on establishm ent census, the
number of firms and employees engaging in "manpower-leasing bus iness"
was 398 and 8,814 respectively in 1986. However, the number jumped to 1,
363 and 27,072 in 1991. The Ministry of Labor estimated that as of 1991
2,000 l ease firms were supplying about 100,000 leased workers in the
following areas- 513 cleaning, 218 security guard, 815 building, 322
production-related, and 52 office management lease firms.
However, it is doubtful that such official statistical data reflect the
e.act s ize of manpower-leasing businesses. Quoting the estimations made
by the lease f irms themselves, Jung, In-su and Yoon, Jin-ho (1993) said
that including such s imple services as security guard, cleaning, etc.,
400,000 to 500,000 workers we re engaging in leased work.
According to the 1992 research on the situations of five lease firms and
751 le ased workers, legal work such as security guard, cleaning, and
loading and unlo ading had been the main work for leased workers until
1992. However, leased job s are recently being found in such ordinary
jobs as production and office work or in jobs contracted through
employment agencies such as interpretation, trans lation, typing,
housekeeping service, and nursing. The research also showed tha t 40% of
the total leased workers were in office jobs. The rest were, in the fo
llowing order, in facility maintenance, casual labor, technical jobs, and
drivi ng. Then, among the total leased workers in office jobs, 75% was
female. In inv estigating in detaile, the jobs of the leased female
office workers, we can see that they engaged in general office work and
office assistant work, document re ceiving and ushering, office equipment
manipulation, and accounting. All of the se jobs used to be occupied by
low-rank regular workers.(Jung, In-su and Yo on, Jin-ho (1993).)
In the 1995 survey with 538 leased workers, it was seen that they were
largely occupied in such jobs as facility maintenance and repair, office
work and offic e assistant work, security guard, telephone-answering, and
ushering. Also, the survey asked who had previously engaged in the same
jobs that leased workers we re performing and discovered the phenomenon
that leased workers had been replac ing regular workers.(Cho Soon-kyung,
"Ten Myths of Leased Work and Its Real ity," Paper presented in the Open
Hearing, The General Preparatory Committee of Democratic Labor Union
(GPCDL), October 25, 1995.)
The wage levels of leased workers are not parallel with that of regular
workers who have similar qualifications as leased workers. The research
conducted by Ju ng, In-su and Yoon, Jin-ho (1993) revealed that male and
female leased workers were paid 73.5% and 68.8% of the wages of regular
workers, respectively. In Cho , Soon-kyung's research (1995), the percent
was only 60.3. According to the res ults of Song, Da-young's research
(1991), the wage level of female leased worke rs was merely about 50%-60%
that of female regular workers who performed the sa me tasks. The wage
gap was also widened by the differences in bonuses, lunch al lowances,
and job allowances rather than by the differences in basic wages.
According to Cho, Soon-kyung's survey (1995), 61.7% of leased workers
had provi ded their services in the same workplace for more than one
year; one-third of t hem had worked in the same place for more than three
years.
This finding challenges the validity of the argument that firms hire
leased wor kers mainly for contingent tasks in order to react to market
changes swiftly an d fle.ibly. Of the total leased workers, only 18.2%
responded that they believe d that it was possible for them to become
regular workers. This small response also weakens the grounds of the
assertion that newly employed workers can becom e regular workers if they
are provided with job information and educational tra ining.
Since a client user-firm can dismiss leased workers simply by canceling
its con tract with a lease firm, leased workers are highly vulnerable to
a seriously un stable state of employment. In Cho, Soon-kyoung's survey
(1995), 64.1% of the t otal leased workers answered that a leased labor
contract had been suspended by the one-sided decision of user-firms. It
is believed that such employment unsta bility of leased workers is a
natural consequence of employment practices which take advantage of
leased works as tools to adjust the quantity of the labor for ce.
According to the research findings as to the reasons firms employ leased
wo rkers, firms hired leased workers for the following purposes: out of
100%, 46.7 % to reduce wage costs; 22.4% to prepare for temporary changes
in labor demand; 13.3% to facilitate easy labor relations, and convenient
dismissal of leased wo rkers;9.7% to provide technical knowledge; and
7.9% to meet other needs(Jung, I n-su and Yoon, Jin-ho, 1993). Song,
Da-young's research (1991) shows that in th e case of the securities and
insurance industry leased workers were introduced on a full-scale basis
after 1987, when the labor movement became active. This i s an obvious
e.ample to illustrate that a leased work system was introduced for the
purpose of suppressing worker demands.
Furthermore, as we have seen earlier, 70% of leased workers could not
avoid con tracting leased jobs because there were few regular jobs left
for them. However , they did not want to leave as leased workers and so
most of them worked invol untarily. Therefore, their level of
satisfaction was naturally very low (Jung, In-su and Yoon, Jin-ho,
1993). Cho, Soon-kyung found that 63.5% of the leased w orkers engaged in
such jobs because they could not find regular jobs. The highe r their
education, the higher the ratio was. Of the total leased workers 82.2%
complained about their working conditions. In response to the question as
to wh ether they wanted to continue working at the leased jobs, 75% of
the total answ ered that they hoped to become regular workers(1995).
When we combine the results of the surveys concerning the situation of
leased w orkers, we can conclude that the number of leased jobs e.panded
mainly because of the firms' need. This development produced unfavorable
side effects such as the substitution of leased workers for regular
workers, the unstable employment of leased workers, the division of the
labor market, the abuse of leased worker s, the deterioration of their
wage and working conditions, and so on.
To improve the inferior working conditions of leased workers and to
establish t he stable employment conditions for them, systematic supports
should be put int o place. However, two viewpoints are currently in
bitter conflict over the legi slation of a leased labor law. Those who
advocate it assert that the enactment of leased labor law will protect
the workers, but those who reject it contend t hat the strict prohibition
of leased work is a better way to shield workers if there is a chance
for the legislation to stimulate the e.pansion of leased work .
The government announced in December 1993 that it would legislate a
labor-relat ed law entitled "A Bill Relating to the Regulation of the
Manpower-Leasing Busi ness and to the Protection of Leased Workers."
However, the approval of the bil l has been detained because the
different viewpoints were in strong confrontion on the issue of the
current legislation. The bill is again before a regular ses sion of the
National Assembly.
With the support of the Korea Employer's Federation, the advocates
maintain tha t a leased labor law should be legislated. They claim that
leased work has been created by the autogenous needs of labor
market-demand and supply-and fulfills the following economic functions
in the labor market. First, the use of leased work provides firms easy
access to a certain labor force which is demanded in t echnical fields or
for firms to perform technical functions. Additionally, when a sudden
surge in the demand for labor occurs, leased work helps firms to use t he
manpower fle.ibly. Thus, the cost of labor can be reduced. Second, the
publi c job networks of the Korean labor market are not efficient enough
to connect f irms and laborers in the current market situations. So a
leased work system can enlarge the demand and supply of the labor force
and consequently curtail the t ransitional costs by connecting both
parties through private lease firms. Third , it is not easy for unskilled
laborers to enter the labor market. For them, th e leased work system can
offer an opportunity for on-the-spot training. Fourth, as a secondary
labor market, leased work provides an idle labor force with oppo
rtunities to find jobs. Thus, it can create opportunities for
employment.(Nam, Sung-il (1993) and Park, Joon-sung (1993).)
However, it is doubtful that these positive roles of leased work are
applicable to the Korean labor market. Judged from the results of the
above surveys, the r esponses of workers are mostly negative. Even the
Western countries' e.perience s with leased work systems have not found
that the system can play positive fun ctional roles in the labor supply
and demand mechanism. In fact, since the user -firms always manipulate
the system for their own convenience, it has been foun d to play negative
roles such as "hiring and firing" workers, dividing workers into a core
and a peripheral group, and disturbing employment stability in the labor
market.(Lee, Kwang-taek (1993).)
For e.ample, three out of four Japanese leased workers are females who
do unski lled jobs such as office automation equipment manipulation and
document filing.
Only 30% of these female workers are registered for employment
insurance. In ad dition to this, the right to work is not secured in
Japan because maternity lea ve and childcare leave are not guaranteed in
principle for female leased worker s. Furthermore, employment insurance
is cancelled in Japan upon delivery. In 19 86, when the leased labor law
was enacted, the number of leased workers was 80, 000 in Japan. However,
the number increased four times to 310,000 in 1989. Sinc e 1992, when the
economy entered into recession, leased labor contracts have se ldom been
renewed and the effective job-offer rate dropped several times. All o f
these factors have caused leased workers to be the first on the list to
be sa crificed by employment adjustment.(Danaka Humiko and Kubaouku
(1994), pp .46-47.)
As observed in 1993, when the leased labor law was about to legislated
in Korea , it was not desirable to introduce a system, especially one
like the Japanese leased labor system, without adapting it. We need to
deeply consider the lesson s learned from the e.periences of foreign
countries. There are valid severe cri ticisms of the Japanese law because
it leaves outside its jurisdiction such mat ters as regulating the
intermediary commission which is the major issue concern ing
worker-leases, securing the wages of workers, and regulating the
cancellati on of lease contracts.(Lee, Kwang-taek (1993).)
Japanese law pays little attention to the protection of leased workers'
rights . It is now confirmed that a legal step to curb the e.ploitive
practices, which have prevailed for the past ten years in Japan since the
enactment of the lease d labor law, are hard to implement on a practical
level. Thus, Japanese are sug gesting that the law be amended.
Since the 1990s there has been a rise in the demand that job information
and em ployment agencies be left to the free market mechanism following
the trend of d eregulation. However, because they are believed to possess
the nature of public goods, it is predicted that the free market
mechanism may have a high probabili ty of failure. Thus, the government
should first reinforce its functions to sta bilize the employment. After
that, the free labor market mechanism should be cu ltivated to enhance
its efficiency.
It is recommended that the government should not attempt to hurriedly
legislate the lease law, which has repeatedly caused controversy.
Instead, the government should concentrate its full efforts on setting up
electronic data networks conc erning (un)employment and available jobs
throughout the nation on the basis of the employment insurance system
that came into effect from July this year. Such networks will be more
efficient than lease firms in matching labor supply and d emand.
On the other hand, as the labor advocates that oppose the legislation of
lease law contend(The major reason to oppose the legislation of Leased
Labor L aw is the anticipation that the legislation cannot really protect
leased worker s but will only result in the mass production of these
workers.) we need to think about whether or not outlawing leased work can
prevent the fu rther e.pansion of leased laborers.
The number of leased workers is e.pected to grow in spite of being
outlawed, un fortunately. It is, thus, undesirable to continue leaving
leased workers withou t legal protection. If the leased labor law should
be legislated for the protec tion of the leased workers themselves, the
following requirements must be satis fied- strengthening the requirements
for lease-firms, strict regulation for the duration of the lease,
clarifying the whereabouts of the user's responsibility between lease
firms and user firms.(For more specific data on the legisl ation
direction for the Leased Work Law, see Lee, Eun-young (1992), Lee, Kwang-
taek (1993), and Kim, So-young (1995).)
However, it is not easy to legally supervise these clauses of the law
to deter mine whether or not they are actually practiced after the law is
legislated. Ge rmany recently inserted "a clause concerning using leased
workers" in the Law o f the Labor-Management Council and made all rights
stipulated in the law equall y applicable to workers leased by
user-firms. This will be a relatively easy wa y to ascertain whether or
not the working conditions for leased workers is appr opriate and whether
leased work e.pands recklessly.
The findings of studies on contingent types of employment, such as
part-time, f i.ed-term, and leased work, have been analyzed so far in the
previous chapters.
Their results suggest that the number of such workers is increasing in
each typ e of contingent employment, and the phenomenon is penetrating
into various indu stries. It is especially conspicuous in office jobs
mainly because firms alloca te contingent workers to simple office jobs
when office automation is becoming increasingly prevalent throughout in
the economy. In addition, the supply side factor is another contributor
encouraging the increase in contingent employment because the workers'
preference for office jobs results in an e.cessive supply of white
collar labor. Eventually, these e.cessive laborers cannot find jobs an d
as contingent workers, they suffer from disadvantages in general working
con ditions including lower wages and unstable employment. Moreover, they
cannot ta ke advantage of the fle.ible working system that is the
original characteristic of contingent jobs because they work mainly as
quasi-full-timers. Consequently, most of them remain as involuntary
contingent workers who hope to become full-t imers. Thus, it is the
e.isting market mechanism for the mobilization of the la bor force cannot
adapt to the innate fle.ibility of contingent employment.
POLICY TASKS- THE STABILITYOF THE FEMALE EMPLOYMENT STRUCTURE
In the West, the theory of "labor fle.ibility" has been carefully
developed on the basis of a long history during which employment was
guaranteed. The theory mainly focuses on how to balance labor market
fle.ibility with workers' rights.
Fle.ibility was demanded to be able to swiftly react to the rapid
changes in th e world's economic environment. The first reason why
European countries were re luctant to take direct steps to activate labor
fle.ibility was that they were n ot sure that as fle.ibility increased,
the rate of unemployment would drop. The second reason was that they
feared that as fle.ibility increased, negative aspe cts would surface
such as an increasing rate of unemployment, the wage losses b y the
unemployed, the obstacles in the career path of young workers, diminishin
g motivation to work, and uncertain prospects for regular employment.
To overcome the high rate of unemployment in Western societies, it was
suggeste d that complementary measures for employment be fle.ible. Thus,
quantitative fl e.ibility policies were implemented, such as curtailing
and restructuring worki ng hours, early retirement, and increasing the
number of contingent jobs. As a result, an appropriate level of
protection was guaranteed to promote the workin g conditions and
employment stability of contingent workers.
It is informative to study the conte.ts out of which European labor
fle.ibility policies evolved because there was a need to introduce
countermeasures for the lingering high rate of unemployment. However, in
Korea the demand and supply fo rces in the labor market should first be
balanced because the labor market suff ers from only a slight sectoral
shortage in the labor force. It would be foolis h to think of labor
fle.ibility as a cut-and-dried way to solidify and to enhan ce the
national competitiveness, merely because the West's labor market is emph
asizing such fle.ibility. Korean society has a weak foundation for
employment s tability. Furthermore, measures to enhance the employment
stability for the con tingent workers are virtually none.istent. The
lesson learned from the West's e .periences tells us that it is too early
for Korea to consider labor force fle.
ibility as the most urgent task for the Korean labor market to
undertake. It wi ll be an appropriate task only after a fair level of
protections for contingent workers are in place.
The unstable trend of female employment is becoming more visible and the
prospe ct is e.pected to become worse. Therefore, it is very urgent to
take steps to e stablish a stable employment structure for female
workers. To do so, fundamenta l countermeasures should first be drawn up
to correct the current situation, wh ere the quantitative fle.ibility
strategy is impacting female workers at large.
It is necessary to search for ways to set up plans to foster core
laborers thro ugh the development of female workers' competencies.
Second, some adequate prot ective plans should be laid out for workers
who chose contingent jobs voluntari ly or involuntarily. Last, the
coverage of the employment insurance system, whi ch was put into
effective from July 1995, should be e.panded to help to stabili ze the
employment of contingent workers, and effective public job training prog
rams and solid work systems should be set up.
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