Party leaders crash over how to reform labor market

Leading Saenuri Party Chairman Kim Moo-sung and main opposition New Politics Alliance for Democracy leader Moon Jae-in have agreed broadly on the need for labor market reform but crashed over on the method. They met at a panel discussion meeting "Labor Market Reform: How?" hosted by the Institute for the Future of State on Monday at the Korea Federation of SMEs building in northern Seoul.

Kim emphasized flexibility of labor market taking example of over-protection of regular workers, while Moon stressed chaebol reform and said the wage peak system currently pursued by the government and leading party can`t service as alternative.

"In Korea, the seniority-based wage system based on years of labor still prevails," Kim said. "This has prompted companies to deal with the changing environment through long work hours and use of non-regular or contract workers, which has led to a decline in productivity and worsening of bipolarization."

"Wage peak system doesn`t directly lead to job creation. Arguing that wage peak system is key to labor reform simply ignores what labor reform is about," Moon said. "Chaebol companies hoard cash reserves worth 710 trillion won (600 U.S. billion dollars), which is half the size of Korea`s GDP. They should be unleashed and invested in creating jobs for young people."

Kim and Moon delivered their own congratulatory remarks but didn`t engage in discussions. After the meeting, Kim met with reporters and said, "Chairman Moon`s speech is basically indifferent from what I think. (Like what he said) I don`t consider wage peak system as the essence of labor reform."