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South Korea ranks near the bottom in labor productivity within
the Organisation for Economic Co-operation and Development
(OECD) as South Koreans work long hours even while creating
little value added, OECD data shows.
"You need more investment in skills, more flexibility in the
labor market, more flexibility in the products market," OECD
Secretary-General Angel Gurria told Reuters in an interview,
adding South Korea's labor productivity is about 50 percent of
that for the best members within the OECD.
South Korea's gross domestic product value per hour worked stood
at $31 in 2015, 48 percent of the United States and the
fifth-lowest among the OECD members.
Liberal President Moon Jae-in has promised to create more jobs
while at the same time cancelling his predecessor's labor reform
measures. Moon took office in May in an election held ahead of
the schedule after his predecessor's impeachment.
Moon has also promised to put a policy priority on narrowing the
widening income inequality. A panel already raised next year's
minimum wage by 16 percent and the government plans to sharply
increase spending on hiring public workers.
In response to criticism that Moon was leaning too much toward
labor unions and income redistribution, Gurria said it was
important for the government to take a balanced approach in
policy between income inequality and economic growth.
"If you are trying to favor the unions by having more rigid
labor market and keeping wages very high, you could be blocking
people from getting new jobs," he said, adding the young people
are more likely to suffer.
"The young (suffer more) because the older people already have
jobs, they belong to the unions and they are better protected,"
he said.
(Reporting by Choonsik Yoo; Editing by Kim Coghill)
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