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Will Moon Jae-in’s promise to increase employment by reducing working hours really work?
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승인 2017.10.17  15:57:02
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Korea’s long working hours and intense working culture are famous throughout the world. However, the country’s unemployment hit a 17-year-high of 4.2% in May and in August youth unemployment stood at a huge 10.7 percent,

Looking at these two issues, Korea’s president Moon Jae-in has recently decided that one way to increase employment will be by reducing working hours.

This comes as he looks to implement an election pledge to create over 800,000 new jobs in the public sector.

According to the Korean Presidential office and reported by Yonhap News, Moon said that “without job sharing through reduced working hours, it is impossible to significantly raise the country’s employment rate or improve the quality of people’s lives.”

Some of the suggestions that Moon has made in order to reduce working hours include: reducing the maximum number of working hours from 68 to 52 per week, banning work-related messages after hours on messaging apps, and obligating companies to record employees’ office time.

These plans are part of an overall reform of labor issues planned by the Moon Government which also include limiting the use of no regular workers to improve the quality of jobs, introduce a 10,000 won minimum wage by 2020, quotas on youth workers, and making it easier for workers to receive unpaid wages.

Why is this needed?

In a well-publicized report, the number of hours worked by workers in Korea was third highest among OECD countries. This report stated that at 2,069 hours per worker, people in Korea worked on average around 305 hours more than the OECD average.

One thing to note is that while still incredibly high, the number of hours worked has been decreasingly steadily and it is currently significantly lower than in 1991 (2,661), 2000 (2,512), or even 2010 (2,163).

The law stands currently that while a work day cannot extend past 40 hours per week, if the employee and management agrees, it is possible to work up to 12 extra hours per working week (Monday to Friday). While this brings the total up to only 52 hours, the weekly total can be extended to 68 if the worker agrees to also work eight hours on Saturday and eight hours on Sunday.

It makes a lot of sense, therefore, that reducing the number of hours worked per person through shorter days and increases in vacation, would, therefore, create more jobs. This would come as more people are needed to fill their working positions and labor is spread throughout the population.

This will work not only through Moon's reforms to the labor market but also through the creation of jobs in the public sector as a way to get things going and encourage the private sector to join in. It is hoped that this will lead to job lead growth where, as more jobs are created in the public sector, more people have money to spend which can lead to job growth in the private sector too.

However, there are some potential obstacles that the president will have to get over if the plan is to be a success. One such obstacle is the fact that a reduction in working hours may only lead to an increase in jobs if per hour productivity stays the same or goes down.

This could be an especially big problem in Korea where another OECD report, this time from 2014, showed that Korean workers actually had not only high working hours, but also had the lowest productivity amongst OECD countries.

This means that the potential is there for a reduction in working to simply lead workers to be more productive during their shorter time at work. This would potentially not really make any changes to overall employment.

Another problem would be if a reduction in working hours also leads to a reduction in wages if companies have to make space in the budget for new recruits. This could especially effect companies that need people to be in work for a certain amount of time, such as retail and hospitality.

While a this would potentially see a rise in employment, a reduction in wages would obviously not necessarily be the type of job growth that Moon has in mind. However, this is where other policies such as the increase in the minimum wage would potentially come in.

Of course, even if the plan to reduce working hours doesn’t lead to an increase in employment, there are still many reasons why a reduction in working hours is a worthwhile cause. Particularly in relation to the second part of Moon’s statement about improving the quality of work life balance in Korea.

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