South Korea Factory Proposal and Impact on Unionized Employees

For the past 5 months, South Korea’s factory markets have been struggling and have been trending into a downward spiral. In April 2019, these factories have been able to increase their productivity, and have displayed better results in comparison to the previous 6 months of operations.

The increase in factory operations was signified by an increase in the overall country’s economy. Conversely, the declining need for South Korean factories can mostly be attributed to a lower need for automobile-related industries.

Factory workers must ensure that robots or advanced technology cannot complete their jobs, or they are at risk of losing their jobs. Asia, as a whole, is known for being at the forefront of most technological developments and therefore, the workers in factories in South Korea are at risk of being replaced by advanced, programmable machinery. Unions have been created in the hopes of decreasing the number of jobs that may be lost to automation, thereby increasing employee job security. However, these union workers are more expensive than most factory owners would like to pay in wages and benefits.  Now that the economy is back on an upswing and factory operations are increasing back to a level they had previously considered normal, the workers may have some increased job stability for the time being.

However, there is another side to this discussion. Employees of factories must be protected under various labour relations acts to ensure that they are treated fairly. The feeling of some people in South Korea may be that having a bad job is better than not having a job at all. Looking from a global perspective, South Korea is an industrialized and prosperous nation that should not treat their workforce poorly.

South Korea also has a large population of unionized workers who are employed at these types of factories. A proposal for a new low-wage car factory is facing opposition from labor unions. The factory employees in South Korea have worked for years to create a labor union and now with a proposed low-wage factory, they are at risk of having their efforts undermined. Complicating matters, people from poorer cities and towns in South Korea are very interested in available work, even if it is at a lower rate of pay in comparison to the union workers.

Additionally, the people of South Korea have seen their factories relocated to other countries where operational costs can be kept even lower. This outflow of jobs can be extremely detrimental to the lives of the people who live where the factories used to be. It is not uncommon for a town to thrive due to the presence of one factory. Yet time and time again, we have seen these factories either closed down or moved, and the entire town collapsing around it. Housing prices plummet, standards of living go down, and these previously prosperous areas systematically become ghost towns with only the memory of a more prosperous past.

The proposed low-wage factory will certainly create tensions between unionized and non-unionized workers. With both sides having a steady list of pros and cons for the proposed project it will be interesting to see what the labor market and unionized work environments look like in South Korea in the next 5 years.

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