1. KCTU Responses to Economic Crisis Korean Confederation of Trade Unions (KCTU)

2. 1. Economic Crisis and Employment Crisis 2. Government Attack on Employment and Labor flexiblization 3. KCTU Responses Contents

3. 1. Economic Crisis and Employment Crisis

4. Economic Crisis 2008. Fourth Quarter GDP Growth Rate : -5.6% 2009. First Quarter GDP Growth Rate : -4.3% 2009 GDP Growth Rate (Estimated) : -2% Formal Unemployment Rate : 4.0%(950,000) (as of March, 2009) Decrease of Employee : 820,000, Decrease of non- wage workers : 277,000 Real Unemployment Rate : 13%(3,438,000)

5. Job Insecurity of KCTU affiliates Massive redundancy or lay-offs in 192 workplaces(80.2%) out of total 242 workplaces affiliated to KMWU  Ssangyong Motors Company announcing massive redundancy of 2,646 workers  Massive lay-offs of 1,000 in Mando Machinery Company Personnel Reduction in public sector : reduced by 13%(13,000 workers) Secondary Financial Institutions

6. Decrease of Real Wage 1 Increase of nominal wage in 2008 by 3.1%, Decrease of real wage by 1.5% due to increase of consumer’s price  Increase of wage by 3.4% for permanent workers, while decrease by 5.5% for temporary daily workers  Decrease of real wage by 6.4% in the fourth quarter of 2008, while decrease by 12.9% for temporary daily workers Precarious Workers affected worstly by economic crisis.  Precarious Workers : 7.37millions(‘01) → 8.40millions(08)  Share of irregular Work : 55.7% (’01) → 52.1%(06)

7. Decrease of Real Wage 2 [Feature1] Size of irregular workers by year (unit:%)

8. [Feature2] Company Size and workers Situation (August, 2008) Decrease of Real Wage 2

9. Duration of Employment is very short and unsafe Average employment duration → 4.8 Years(08) European Countries → 8.5 ~ 13.3 Years Anglo-Saxon Countries → 6.7 ~ 8.3 Years

10. Wage 1 Wage gap by size (wage more than 300= 100) / regular and irregular workers  5~9 Numbers : 58.1%(01) → 58.5%(08)  10~29 Numbers : 69.4%(01) → 55.5%(08)  30~99 Numbers : 72.6%(01) → 60.3%(08) Wage gap by regular and irregular workers 53.7% (00)→ 49.9%(08) (regular workers wage =100)

11. Wage 2 Wage disparity is most severe in OECD countries. [Feature3] Wage disparity in KOR/U.S.A(wage/H P9010) · Korea : 4.8(01) → 5.4(05) → 5.14(08) · U.S.A : 4.301) → 4.5(05)

12. Higher Flexibility and Lower Security Flexibility and lower security related indexes.

13. 2. Government Attack on Employment and Labor Flexiblisation

14. Government Attack on Employment and Labor Flexiblisation 1 Personnel Reduction – 10,000(Government employee), 19,000(Public corporations) Retrogressive reform of labor laws Precarious Workers Act  Extending term-limitation of 2 years into 4 years  Extending sectors allowing dispatched workers Minimum Wage Act  Reduction of minimum wage for elderly workers  Reduction of minimum wage for migrant workers

15. Government Attack on Employment and Labor Flexiblisation 2 Job-sharing by wage-reduction?  reduction of initial salary to college graduate in big companies by 28%  Reduction of initial salary in public sector  Compulsory return of government employee wage within the ratio of 5 %  Employ low-wage interns(six-month contract base)  Government expenditure focusing on creating low-wage 6-month temporary jobs  Personnel reduction in permanent jobs

16. 3. KCTU Responses

17. Create Decent Jobs and Ensuring Job Security 1.Create decent jobs instead of precarious employment.  Creating 1 million decent jobs in public and social services industries: elder care, childcare and child education teachers, healthcare workers, etc. 2.Job Sharing instead of job layoffs  Reduction of real working hours from 2,261 yearly working hours to 2,000 yearly working hours. Creation of 1.5 million jobs by reforming work shift system from “day-and-night shifts” to “two day shifts.”

18. Create Decent Jobs and Ensuring Job Security 3.Preserving Jobs.  Enacting ‘Special Act for Employment Security’ Support for companies who avoid lay-off. Preserve employment through reduction of work hours. 4.Enact pro-worker legislation instead of anti-labour policies  Precarious Workers Act  Minimum Wage Act  Tax reduction policy for the rich.

19. 5.Preservation of wages in case of reduction of working hours.  Social support system Special tax for employment, Use of companies’ retained earnings Support for companies who preserve employment through reduction of working hours  Reform of the wage system from hourly based to monthly based. 6.Introduction of employment quota system for the youth. Create Decent Jobs and Ensuring Job Security

20. Enhancing Social Protection System Strengthening the minimum wage system. Reforming unemployment insurance system and introduction of unemployment assistance system. Increasing the minimum cost of living. Build and strengthen social safety nets for the unemployed. Build universal safety net scheme for working families.

21. Regulating Transnational Financial Capital Reform the current international economic system to a more fair and responsible one that transcends financial regulation and oversight to encompass even world trade and investment. Initiate new dialogue on ecologically and socially sustainable global economic mode. Polices and rules of the IMF, WTO, and the World Bank must be overhauled and changed. Participation of trade unions, civil society groups, and other stakeholders must be promoted and safeguarded.

22. Ensuring Basic Labour Rights 1.Stop the plan for retrogressive reform of Precarious Workers Act and Minimum Wage Act. 2.Strengthen support for precarious and low wage workers 3.Implement ILO recommendations 4.Release all imprisoned unionists 5.Ensure precarious workers’ rights

23. KCTU All-out Struggle plan in June Request Social Bargaining on 5 Demands submitted by KCTU on May 19 th Government’s unwillingness for negotiation and dialogue KCTU announcing all-out struggles including general strike in June Strengthen Social Solidarity to stop retrogressive labor law reform including Precarious Workers Act and Minimum Wage Act