The monthly wage gap between regular and non-regular workers has widened to 1.94 million won, the largest since the data series began in 2003. Non-regular workers — temporary and contract employees — earned an average of 2.112 million won a month over the June-to-August period, just 52.1% of the 4.052 million won earned by permanent employees, Statistics Korea said on the 21st. The number of non-regular workers rose by more than 100,000 over the past year to a record 8.67 million, or 38.5% of all wage earners, while permanent employees increased by only 10,000. That means nine out of every 10 jobs added over the past year went to non-regular workers — evidence that polarization in the labor market keeps worsening.
South Korea's cumulative annual exports are expected to top $1 trillion next month, lifted by a boom in semiconductors. Even so, the increase in the number of employed people from January through September was the smallest in six years. Manufacturing jobs, widely regarded as quality employment, actually fell by 51,000 from the same period a year earlier. The export boom is not translating into better jobs.
The government must confront the shadows in the labor market that are obscured by glowing economic forecasts — growth above 3% this year and per capita national income crossing $40,000. On the ground, non-regular workers aged 60 and over have reached a record 3.18 million, and part-time arrangements now account for more than half of such positions, a clear shift toward cheaper and shorter-term employment. The share of marginal firms unable to cover interest payments with operating profit also hit a record 42.9% last year. The result is a deepening two-tier labor market in which status and treatment depend on the size of the employer and the form of employment.
The Lee Jae-myung administration is pursuing pro-labor policies under the banner of inclusive growth. In reality, though, the gains are going mainly to permanent employees at large companies. Under employment protections centered on regular positions and a seniority-based pay system, companies inevitably hesitate to hire. They turn instead to non-regular workers or outsourcing, which deepens the polarization. The government should undertake structural reform to make the labor market more flexible, including a shift from seniority-based pay to a system based on job duties and performance. Real labor reform means moving away from policies that entrench the privileges of regular employees and toward creating quality jobs for young adults and others.