Korean inquality/strikes

Here's some very recent information on the situation in South Korea.  The
"economic miracle" has run into some serious "contraditions."  While
aggregate economic growth seems to be likely to resume, there's a (sadly
familiar) story of polarization unfolding, too.

One aside to Mr. Gunning and others who want folks on the list to define
basic terminology (i.e. capitalism).  This list was set up with the idea
that it would be a place for the discussion of the ideas of world-system
analysis.  Perhaps some reading of the works of scholars like Immanuel
Wallerstein, Andre Gunder Frank, Giovanni Arrighi, Chris Chase-Dunn, etc.
might be a good way to understand some of these concepts.  While I've
enjoyed some of these discussions, I get the feeling that some of the
participants only know about the world from what they read on the internet
and little else...

David A. Smith
Sociology, UC-Irvine


KOREA LETTER
THURSDAY, MAY 13, 1999

KOREA TIMES

EDITORIAL

[Editorial] Crumbling Middle Class

We are alarmed at the remarks of a high-ranking government official that
the nation's middle class is crumbling under the lingering economic crisis.
This situation is particularly worrisome because those in this social
stratum are the backbone of society, largely responsible for maintaining
its stability.

The decline of the middle class is not merely a sign of economic
difficulties, but an indication that society's existence may be in danger.
The reduction in the number of people in the middle-income bracket points
to the plight of salaried workers, the people hit hardest by the ongoing
business restructuring program.

This circumstance is actually nothing new and had been predicted from the
onset of the crisis in late 1997. But senior presidential economic
secretary Kang Bong-kyun's revelation that the situation is worsening has
prompted a renewed sense of uneasiness. He said in a special lecture
Wednesday that about 300,000 people are estimated to have fallen from
middle-class to low-income status. The shrinking of the middle class is
said to have made the rich richer and the poor poorer, a highly undesirable
situation liable to cause friction between those in the different income
brackets.

Kang's announcement was based on the fact that the number of those on the
welfare rolls, which stood at 1,414,000 in 1997, abruptly jumped to
1,486,000 last year and to 1,745,000 in 1999. Meanwhile, the average
monthly income of the middle class dropped by 10 percent to 1,730,000 won
in 1998 from the previous year's 1,934,000 won.

Other government data support our concerns. According to a report by the
Office of Statistics, the top 20 percent of the population in terms of
earnings accounted for some 40 percent of total national income last year
whereas the share of the bottom 20 percent stood at only 7.4 percent. Thus
the widening gap is clearly apparent, with 80 percent of the populace
forced to share only about 60 percent of the nation's total income.

In the early 1990s, when the national economy was booming, some 80 percent
of all salaried workers considered themselves in the middle-class income
bracket. Having a large number of people in the middle class strata is
crucially important, being that the strength of the middle class is a
strong determinant of social stability.

A recent survey by Hyundai Economic Research Institute showed that
one-third of those who previously regarded themselves as middle class were
of the opinion that they had fallen into the low-income bracket. Corporate
reform-related mass layoffs and income reductions have obviously undermined
the very foundation of the middle class. Declining real estate prices have
also played a role in giving people a sense of deprivation.

To revive the waning middle class is the foremost task for the government.
The growing income disparity between social strata is the root cause of
increasing social instability, as is expressed in the old saying that
``people's economic competency is necessary for the constancy of their
minds.''

The recent feeble signs of economic recovery are insufficient to invite
predictions of rapid economic growth. Reviving the crumbling middle class
is not something that is likely to be accomplished in a short period of
time. The immediate task for the government is to create as many jobs as
possible to reduce the number of jobless. The chief presidential secretary
even emphasized in his speech the importance of expanding job opportunities.

Nevertheless, one nagging concern is that reducing unemployment will not
necessarily lead immediately to the expansion of the middle class. This
will surely take time. The indisputable fact that a robust middle class is
essential to maintaining social stability must remain at the forefront of
our minds as we work to narrow the income gap between the social strata.

OTHER

THOUSANDS ON STRIKE

SEOUL, May 14 (AFP) - Thousands of South Korean union workers at major
industrial plants rallied Thursday against mass layoffs but signs of easing
labor unrest emerged with workers at the largest state-run hospital
returning to work.

Fears that the unrest could escalate again, however, remained as staff at
other hospitals were yet to call off plans to stop work on Friday. Union
workers at the Seoul subway were also planning to down tools.

"An agreement was tentatively reached between the management and union.
Union workers have all returned to work," a union official at the state-run
Seoul National University Hospital told AFP.

He said the hospital had agreed to give workers "some increase" in wages,
and further discussions would be held later over layoffs and other working
conditions.

Union workers at the Korea Cancer Center hospital, however, were on strike
for the second day.

Meanwhile, the government gave in to KCTU's demand for dialogue, but on
condition that the strikes are first called off.

"We will hold talks but the KCTU must first call off the strikes. The KCTU
says they will call off the strikes depending on the progress of the talks.
And so we will have to wait and see," a spokesman at the Labor Ministry
said.

KCTU's head Lee Kap-Yong, however, said the strikes planned for this week
would go ahead as scheduled.

Some 8,000 union workers, members of the powerful Korean Metal Workers'
Federation (KMWF), from 120 different worksites gathered in Seoul,
demanding working hours be shortened and the government halt layoffs.

Wearing red headbands and carrying colourful banners, the workers vowed not
to give in until their demands were met.

"Halt layoffs. We want job security," they chanted.

The KMWF, under the direction of the militant Korean Confederation of Trade
Unions (KCTU), launched a second wave of strikes on Wednesday with 25,000
workers downing tools.

The strikers include workers at Hyundai Precision, Daelim Motor and Korea
Heavy Industries, said the metal workers' federation, whose members include
workers in auto-related industries.

Union workers at the Seoul subway, members of the 550,000-strong KCTU, are
also expected to join in the strikes from Friday.

"We are still holding last-minute negotiations at the moment. If we manage
to reach a deal before tomorrow, the strike will be called off. Otherwise
we will go ahead as scheduled," a union official at the Seoul subway said.

Last month, the government took action against subway workers who joined in
an eight-day strike, sacking some and fining others.

The subway union has accused the government of cracking down on union
members and their activities even after the strike had ended.

Union workers accuse the South Korean government of forcing them to make
sacrifices while sprawling conglomerates are allowed to get away with
cosmetic reforms.

In South Korea, where sackings were once illegal in a culture of jobs for
life, a total of 1.8 million people, or 8.1 percent of the workforce, were
out of work in March.