Paradox of job policy: Irregular workers increasing despite Moon's rosy promise

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By Yoon Ja-young

Getting rid of precarious, irregular jobs was one of the key pledges of President Moon Jae-in to address social inequality in the form of dualism in the labor market ― the gap between high-paid, well-protected regular employees, and low-paid, irregular ones with unstable working conditions.

Starting from pressuring state-run companies to give contract workers regular positions, despite fairness issues, the administration has kept "zero irregular workers" at the top of its employment agenda. As of June, a total of 196,000 irregular workers in the public sector had gained regular status.

With only a few months left before Moon leaves office, however, the number of irregular employees ― including temporary, contract, part-time and outsourced workers ― has surged to a record high, as experts say the government's short-sighted employment policy has brought about the completely opposite outcome to the promised results ― just as its housing policy did.

Record-high number of irregular workers

According to the latest data released by Statistics Korea, there were 8.07 million irregular workers this year, up 640,000 from 2020. This is the first time for the number to surpass the 8 million mark since 2003 when the government started compiling this type of employment data, though the agency says figures prior to 2019 are not directly comparable because they were compiled differently.

Now, four out of 10 salaried workers here are classified as having irregular jobs. However, the government says the situation is not as bad as it seems, stressing that major indices related to working conditions, such as average monthly wage and social insurance coverage, have improved for irregular workers.

Still, it is undeniable that the administration's "zero irregular jobs" initiative has failed. Under Moon's leadership, the portion of irregular workers in Korea grew to be the second-highest among OECD member nations; only trailing Colombia as of 2020. In 2017, Korea was ranked eighth.

The government has explained that COVID-19 is one of the reasons for surging irregular employment, alongside population aging as senior citizens tend to only seek short-term or part-time jobs.

But some experts have other explanations.

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"The government would of course blame COVID-19, but fundamentally, it is a failure of the administration's economic and employment policies," said Rep. Yoo Gyeong-joon of main opposition People Power Party, who previously headed Statistics Korea.

He said the problem started with the administration's "income-led growth" strategy, in which the minimum wage was raised to theoretically trigger consumption, thus pulling up economic growth.

"In 2019, the economy was not in good shape due to the conflict with China over the deployment of a U.S. THAAD missile battery, as well as the restructuring of the manufacturing and shipbuilding sectors. The minimum hourly wage, however, was de facto pulled up to above 10,000 won when including weekly holiday allowances, which was unsustainable for the economy. It ended up decreasing decent [regular] jobs while increasing irregular jobs," he said.

Unsustainable policy

To sustain faltering employment numbers, the government created massive amounts of short-term jobs especially for senior citizens, which pushed up the number of irregular jobs. The number of irregular workers aged 60 or over has increased by 270,000 over the past year. But such short-term jobs offered by the government are more like social welfare, and once the government ends funding, the jobs disappear.

"The irregular employment problem is not as simple as the government thinks. The more serious problem is the irregular jobs at private SMEs, not in the public sector, but the government doesn't seem to be interested in this fundamental problem. It has only been holding meaningless events of granting regular employment status to irregular workers at government-run companies, which only narrows the chances for young jobseekers to get a job there," Rep. Yoo said.

The Incheon International Airport Corporation, for example, granted permanent jobs to irregular workers following government pressure, but it triggered controversy over fairness between those lucky ones who were already working there at the time and others who were preparing to get jobs there. It is cited as a symbolic incident that made some young voters turn their backs on the Moon administration. Following the switching of irregular jobs to regular jobs, the labor costs at 350 state-run organizations increased by 8.2 trillion won from 2017; and they slashed new job openings by around 10,000 ― to 30,735 last year.

Young jobseekers losing opportunities

Irregular jobs are also becoming more common among young people. The ratio of irregular workers among those in their 20s stands at 40 percent, compared to 32 percent in 2016. Businesses are cautious in hiring regular workers as once they are hired, employment usually has to last until retirement with salaries increasing each year under a seniority-based pay system.

Yoo Jin-sung, a research fellow at the Korea Economic Research Institute, said the government should be cautious in extending the retirement age of workers or hiking wages. If the retirement age is extended, the wage system must also be reformed, such as introducing and expanding merit-based salaries or a peak wage system, he says.

"To solve the employment problem for young people, systems should be overhauled first to create jobs. The (over-) protection of regular workers should somewhat decrease while there should be more flexibility in employment so that businesses have more room to create jobs," he said.

Park Woo-ram, a fellow at the Korea Development Institute, also suggests that the wage system should be revised, as the pay gap between regular and irregular workers is expanding. Irregular workers are, on average, paid 1.77 million won a month, 1.57 million won less than regular workers. The gap has expanded to a record high since 2003.

"The wage should be set based on productivity, achievement and tasks the workers are handling, and there shouldn't be discrimination based on age, gender or form of employment. It should reflect what the workers have currently achieved and their value," he said.