Thursday, June 21, 2007

On inequality and labour regimentation, in North and South

According to a story in the Hankyoreh this week, this year's Employment Outlook 2007, released by the OECD on June 19, records the income gap between the upper and lower 10 percent of wage-earners in South Korea as the third largest among 20 of the 30 OECD countries for which data is available.

Not surprising, much of this inequality has expanded over the 10 year period from which Korea rapidly began experimenting with Neo-liberal economic reforms: basically, from the time of Kim Yong Sam's Sehyehwa reform.

In the survey, South Korea's score stood at 4.51, followed by Hungary (5.63) and the United States (4.86)

In addition, South Korea's income gap has been widening significantly for a decade since 1995. During the period, the ratio of South Korea increased by 0.87 points from 3.64 in 1995. In term of the degree of widening income gap for the past decade, South Korea was also ranked third, followed by Hungary ( 1.67 points) and Poland (0.91 points). Of the 20 countries, only Ireland (3.57) and Spain (3.53) narrowed their income gaps over the past 10 years. (see gragh)

Norway (2.21), Sweden (2.33), and Finland (2.42) showed the least income gap among the nations examined.

The OECD report pointed out that South Korea's social safety net, along with those of Mexico and Turkey, is not robust. In particular, South Korea spent less than 5 percent of ordinary tax revenues on its social safety net to ensure that low-income earners are not left without protections and services. This figure is markedly smaller than the OECD average of 43 percent, and put South Korea last in the rankings. In addition, only South Korea and Mexico spent less than 10 percent of their gross domestic product (GDP) on social services.

The OECD also expressed concern over the low level of spending on social welfare in another report on the South Korean economy on June 20, despite a sharp increase in the percentage of those living in relative poverty in these countries. In the mid-1990s, South Korea's relative poverty rate - the rate of population whose disposable income is below 50 percent of the income of the median income bracket - was hovering around 9 percent, but this figure began to rise sharply starting in 2000 and surpassed the average OECD ratio of the lower reaches of the tenth percentile, the report said. The OECD advised South Korea to expand public spending for the underprivileged to help them earn the minimum cost of living.

The point here is that reform has not been followed up with redistribution, this is revealing of the fact that for workers and others in Korea, neo-liberalism has offerred few carrots and often a very big stick.

Alongside the article on the OECD's survey of inequality, there were also two other telling stories examining the disciplinary approach taken towards labour.

One of the stories is based on documents leaked from a Chaebol owned petrochemical firm that reveals the companies strategies for intervening in a union election, which the company is surprisingly up front about in asserting that there nothing wrong in its actions.

The documents, titled "P-project" and obtained by The Hankyoreh, elaborated on how the petrochemical company planned to block the election of a front-running union presidential candidate who had a track record of spearheading labor strikes in the past. In the documents, allegedly written in October 2005, three steps were suggested to prevent the emergence of militant unions by trying to block the candidate.

First, the candidate, referred to as a "tree branch" suspected of possibly calling a labor strike in the future, should be 'singled out.' Second, a "branch-cutting" action should be taken, in which negative rumors will be spread about the singled-out candidate. Finally, "gardeners" - company officials planted in the unions as spies - take action needed to eliminate the branch.

Finally, and perhaps the weirdest story of the week, is a leaked video from the "Samsung Mass Games," which have been staged for 24 years by employee's of Samsung electronics.
As of June 20, the two videos had drawn some 400,000 and 600,000 viewers, respectively.The videos drew attention because the mass games were performed in a highly regimented manner, which some viewers have called "militaristic." By holding up colored cards at just the right time, the Samsung Electronics employees created images of a fight between dragons and scenes from animation films.

An official at an affiliate of Samsung Group, who joined the group's membership training sessions in 2003, said, "Employees from each [Samsung] affiliate train for the mass games with the help of experts. Ordinary employees spent about 15 days to prepare for mass games, while a team 'task force,' which plays a key role in the performance, spends two or three months on training," the official said. "Though there is no incentive or bonus for a winner, competition is tough because the Samsung Group's chief executives are gathered to watch," the official added.

Ironically, the games seems like a scaled down version of those held in North Korea, a country where similar regimentation and discipline are used to show off worker discipline through mass spectacle. Strange that the form would also be used in the South as well, in what seems to be a very different application. Then again, maybe there is not so much of a difference between the concentration of power in the hands of domestic conglomerate in the South versus state managers in the North -- with the qualification that the power of the former, thank god, is not as extensive as the power of the latter, thanks, of course, the resilience Korean civil society to have checked some of the worst forms of labour discipline that emerged in the dictatorship period.

Hopefully, those same social movements will be able to do something about the growing inequality, before it gets much worse.

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