Changing Industrial Relations and Labor Market Inequality in Post-Crisis Korea

Abstract

Since the Asian economic crisis in the late 1990s, Korea has developing one of the most unequal labor markets among OECD countries. The proliferation of nonstandard employment and the precarious working conditions of nonstandard workers have contributed to the polarizing labor market. Some of the main reasons to explain this change are the declining labor unions and the extremely fragmented bargaining structure with which the results of collective agreements have affected unionized workers only. Labor unions, once powerful, have been declining constantly and significantly since the early 1990s and their presence has increasingly been skewed toward the large-firm sector. Accordingly, Korean society has formed a strong public perception that unions, staying comfortably in a wealthy firm boundary, have protected exclusively their own members who are in a better position in the labor market and ignored other who are the vast majority of wage earners. This paper examines this view, the so-called the insider-outsider divide, of labor unions. It pays attention to the roles that labor unions have played in the processes of restructuring the countrys post-crisis labor market. Using a brief description of the overall characteristics of post-crisis employment systems and a small set of case studies on the role of the unions in the period of major restructuring, I attempt to examine if (and to what extent) unions exclude periphery workers and thus take part in creating labor market segmentation.