- P-ISSN0023-3900
- E-ISSN2733-9343
- A&HCI, SCOPUS, KCI
ISSN : 0023-3900
The Korean Way of Financial Rationalization and Discouraged Workers
Abstract
The growing number of discouraged workers—those who leave the labor market despite their willingness to work—is a new employment problem facing the Korean economy. The existing literature has attributed this problem to the internal aspects of the labor market, including the power of labor unions, technological development, and a weakening work ethic. However, such approaches cannot explain how this problem has emerged historically. This study emphasizes two alternative factors. One is financial rationalization that has burdened industries with the pressure of cost reductions since the late 1990s and, thus, reduced their labor demand. The other is the hierarchical structure within Korea’s industries that has accommodated the new financial rule in a way that excludes workers from the labor market. The chaebol’s strategies for cost reductions, particularly squeezing small- and medium-sized enterprises (SMEs) and freezing further employment, have exacerbated the SMEs’ problem of finding employment among young and female workers. The labor supply has shrunk, as families have protected these workers by withdrawing them from the labor market. This analysis implies that the global norm of financial rationalization becomes socially risky in Korea, not in and by itself, but because it is combined with Korea’s local institutions.
- keywords
- South Korea, discouraged workers, financial rationalization, hierarchical industrial networks, cost-saving pressure
Reference
Acemoglu, Daron. 1998. “Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence.” NBER Working Paper Series 6658.
Bae, Johngseok, and Chris Rowley. 2001. “The Impact of Globalization on HRM: The Case of South Korea.” Journal of World Business 36.4.
Bank of Korea. 1996-2006. Gieop gyeongyeong bunseok (The Analysis of Entrepreneurial Management). Seoul: Bank of Korea.
Castells, Manuel. 2010. The Rise of the Network Society. Malden: Wiley-Blackwell.
Cho, Deok-hee. 2009. Jejo jungso gieop janggi seongjang chuse dunhwa jindan (An Analysis of Long-Term Stagnation of Korean SMEs in the Manufacturing Sector). Seoul: Korea Institute for Industrial Economics and Trade
Chu, Hyeon, Hong Ji-seong, Lee Yeong-chu, and Hong Seok-il. 2009. “Gyeongje wigi balsaeng ihu hadogeup georae-ui hyeonan-gwa jeongchaek gwaje” (The Analysis of Problems in Subcontract Transactions and Policy Proposals). KIET Issue Paper 245.
Dahrendorf, Ralf. 1979. Society and Democracy in Germany. Westport: Green wood Press.
Dan, Byung-ho. 2005. Bijeonggyujik jeongbu ipbeoban-ui munjejeom-gwa gaehyeok banghyang (The Alternatives to the Government Policies for Non- Regular Workers). Seoul: National Assembly.
Finegan, T. Aldrich. 1981. “Discouraged Workers and Economic Fluctuations.” Industrial and Labor Relations Review 35.1.
Ha, Yong-Chool. 2007. “Late Industrialization, the State, and Social Changes: The Emergence of Neofamilism in South Korea.” Comparative Political Studies 40.4.
Jacobs, D. 2000. “Low Public Expenditures on Social Welfare: Do East Asian Countries Have a Secret?” International Journal of Social Welfare 9.Jung,
Jin Hwa. 2008. “Hanguk gyeongje-wa yeoseong: nodong sijang-ui gujo byeonhwa” (The Korean Economy and Women: Structural Changes in Labor Markets). Paper presented at the Conference on the Change in the Life of Korean Women and the Future Agendas, Korea Chamber of Commerce and Industry, Seoul, November 3.
Kakwani, Nanak, and Hyun H. Son. 2008. “Poverty Equivalent Growth Rate.” Review of Income and Wealth 54.4.
Kim, Andrew Eungi, and Innwon Park. 2006. “Changing Trends of Work in South Korea: The Rapid Growth of Under-Employment and Job Insecurity.” Asian Survey 46.3.
Kim, Doh-Khul. 2005. “Unionization, Unemployment and Growth in Korea: A Cointegration Approach.” Atlantic Economic Review 3.3.
Kim, Hyun-jin. 2006. “Gohangnyeok yeoseong cheongnyeoncheung-ui nodong sijang sikwonseu yeongu” (A Research on the Labor Market Sequence of the Educated Female Youth). In 2005 Hanguk-ui goyong gujo (Korea’s Employment Structure in 2005), edited by the Korea Employment Information Service. Seoul: Korea Employment Information Service.
Kim, Joo-young, and Woo Seok-jin. 2010. Nodong sijang jaejinip-e gwanhan yeongu (A Research on the Re-entry into the Labor Market). Seoul: Korea Labor Institute.
Kim, Seok-jin, and Yang Hee-seung. 2004. Cheongnyeon sireop jungjanggi jeonmang-gwa jeongchaek gwaje (The Long-Term Prospect of Youth Unemployment and Policy Tasks). Seoul: LG Economic Research Institute. Kim, Seong-il. 2008. Daejungsogieop nappum georae siltae josa (A Survey of Subcontract Transactions between LEs and SMEs). Seoul: Korea Small Business Institute.
Kim, Yoo-sun. 2010. “Gyeongje wigi-wa nodong johap-ui daeeung” (The Eco nomic Crisis and the Responses of Labor Unions). Korea Labor and Society Institute Working Paper No. 10-4.
Koo, Hagen. 1990. “From Farm to Factory: Proletarianization in Korea.” American Sociological Review 55.5.
Koo, Hagen. 2007. “The Changing Faces of Inequality in South Korea in the Age of Globalization.” Korean Studies 31.
Korea Federation of Small and Medium Business (Kbiz). 2009. 2009 SME Poll Report. Seoul: Kbiz.
Korea Society Opinion Institute (KSOI). 2006. Gyecheungbyeol gyeongje saenghwal buran jisu (The Index of Economic Instabilities according to Social Stratum). Seoul: KSOI.
Lee, Byoung-Hoon, and Seog Kyeun Kwun. 2003. “Public Policy toward the Innovation-Driven Economy in Korea.” International Journal of Entrepreneurship and Innovation Management 3.3.
Lee, In-je. 2009. “Goyong wigi-wa nodong sijang-ui gujo gaehyeok” (The Employment Crisis and Labor Market Restructuring). Labor Review 34.
Lee, Sook Jong. 2003. “The Politics of Chaebol Reform in Korea: Social Cleavage and New Financial Rules.” Journal of Contemporary Asia 38.3.
Lindbeck, Assar, and Dennis J. Snower. 1989. The Insider-Outsider Theory of Employment and Unemployment. Cambridge: The MIT Press.
Mortensen, Dale T., and Christopher A. Pissarides. 1998. “Technological Progress, Job Creation and Job Destruction.” Review of Economic Dynamics 1.4.
Oh, Minhong. 2007. “Young People Not in Employment, Education or Training in Korea.” Paper presented at the International Conference for Panel Data Analyses, “Employment and Quality of Life,” Seoul, October 25-26.
Onaran, Ozlem. 2009. “Wage Share, Globalization and Crisis: The Case of the Manufacturing Industry in Korea, Mexico and Turkey.” Political Economy Research Institute, University of Massachusetts Amherst, Workingpaper Series No. 132.
Quibria, Muhammad G. 2002. “Growth and Poverty: Lessons from the East Asian Miracle Revisited.” ADB Institute Research Paper 33.
Romme, A. Georges L. 1990. “Projecting Female Labor Supply: The Relevance of Social Norm Change.” Journal of Economic Psychology 11.1.
Republic of Korea. Statistics Korea. 2006. Gyeongje hwaldong ingu josa (A Survey of Economically Active Population). Daejeon: Statistics Korea.
Romme, A. Georges L. 2009. Sahoe josa (Social Survey). http://www.kostat.go.kr/survey/ society.
Republic of Korea. Ministry of Employment and Labor (MOEL). 2009. Sa eopche nodongnyeok josa (Enterprise Workforce Survey). Gwacheon: MOEL.
Republic of Korea. Ministry of Strategy and Finance (MOSF). 2009. “Cheongnyeon goyong chujin daechaek” (Policies for Promoting Youth Employment). Unpublished report.
Shin, Chang-mok. 2010. “Gyeongje haengbokdo jisuro bon hanguk gyeongje”(Korean Economy Theory from the Perspective of the Economic HappinessIndex). CEO Information 750.
You, Jong-Il, and Ha-Joon Chang. 1993. “The Myth of Free Labor Market in Korea.” Contributions to Political Economy 12.
- Downloaded
- Viewed
- 0KCI Citations
- 0WOS Citations