Title: The Effects of Korean Wage Hikes on Korean Trade Structure with the U. S. and Japan
Abstract: During the last two decades, Korea has experienced a rapid economic growth. This growth is primarily the results of two factors; (1) Korean outward development strategy, and (2) a high quality labor force working at a relatively low wage rate. Until 1985, Korean labor market conditions were conducive to the outward development strategy. Before 1985, Korean workers were unable to negotiate their wage with employers through the usual channels of labor unions. As a substitute for labor unions, many Korean firms utilized worker-employer councils, which were a variant of unions. These councils gave a nominal capability of intermediating labor disputes and of accomplishing collective agreements between workers and employers. However, in many firms the leaders of these councils were nominated by employers. Indeed, these workers did not have any meaningful channel to negotiate their wages with employers. Prior to 1985, wages in most small and mid-sized firms were determined by wage regulations which were set up by employers beforehand. In large firms such as conglomerates, the government issued guidelines for the percentile increase of each industrial wage with respect to macro-economic circumstances. Since the increase was typically determined at a much lower rate than the actual productivity growth, most large firms had no reason to deviate from these government guidelines. Furthermore, the National Security Special Law has been in force since 1972. This law specifically prohibited any collective action and collective wage bargaining. With the recent political liberalization in 1985, including the correction of the National Security Special Law and various labor acts, Korean workers started demanding higher wages and
Publication Year: 1994
Publication Date: 1994-10-01
Language: en
Type: article
Indexed In: ['crossref']
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