South Korean President Yoon Suk-yeol took office on May 10 amid a growing economic crisis, exacerbated by the COVID-19 pandemic and the outbreak of the proxy war launched by the United States and NATO. against Russia in Ukraine. The new right-wing administration and the ruling People’s Power Party intend to exploit this crisis to step up attacks on workers and further remove any restrictions on the ability of big business to maximize profits.
In line with ruling class demands, new administration’s program includes ‘bold lifting’, in Prime Minister Han Deok-su’s words, of corporate regulations and tax cuts for local conglomerates and businesses foreign.
Lobby group Korea Enterprises Federation (KEF) said earlier this month: “The new government must take the lead in drastic regulatory reform in line with global standards and improvement laws and systems to advance labour-management relations to create a “friendly business environment”. ‘ that can strengthen the dynamism of our economy and create a virtuous circle of revitalized business investment, job creation and economic growth.
Big businesses have criticized South Korea’s top corporate tax rate of 27.5%, saying it’s too high compared to cities like Singapore and Hong Kong, where rates stand at 17% and Hong Kong, respectively. 16.5%. Yoon also pledged to increase the working week from the current 52 hours and create “labor flexibility,” a euphemism for greater casualization, worsening working conditions and mass layoffs.
This program is to be implemented under conditions where the International Monetary Fund expects South Korea’s economy to grow only 2.5% this year, down from previous projections of 3%. It is the working class that will be forced to bear the brunt of the economic downturn.
In particular, the Yoon administration plans to focus on developing businesses in areas such as semiconductors and artificial intelligence, calling them national priorities. As discussed at the recent summit between Yoon and President Joe Biden, Seoul also plans to work with the United States to establish stable supply chains as part of the US war campaign against China.
Yoon has made it clear that he is available to large corporations. In a meeting in March with representatives of six business lobby groups, he told them: “If officials try to regulate nonsense and abuse their power, call me right away. I will answer the phone immediately.
Yoon also prepares for a confrontation with the working class. He denounced workers who strike for better conditions, in remarks that open the door to a violent repression of workers’ struggles. In March, Yoon’s transition committee said the labor protests were “a source of public distrust of law enforcement.”
During his inauguration speech, Yoon claimed that “the truth is often distorted and grossly distorted…because of animosity between different groups within society.” He continues: “When the masses” – that is, the working class which goes on strike – “beat down and silence those who disagree with them and do so by brute force – it is This is how anti-intellectualism seriously weakens our democracy and puts us in peril.”
Han Sang-jin, a spokesperson for the Korean Confederation of Trade Unions (KCTU), criticized Yoon’s speech saying, “Workers’ strikes are constitutionally guaranteed, but he gave a biased portrayal of a powerful trade union. from a management perspective.
This does not mean that the KCTU will wage a real fight against Yoon’s administration, despite radical rumors to the contrary. The KCTU harbors illusions in the main opposition party, the Democratic Party of Korea (DP), and seeks to support a future DP government, just as it did under former President Moon Jae-in, under whom inequalities have increased sharply.
According to a report published by Shinhan Bank in April, the income gap last year between the richest 20% of society and the poorest 20% increased by 5.23 times. The top 20% saw a 5.9% increase from 2020 to an average of 9.48 million won (US$7,453) per month, while the bottom 20% earned 1. $81 million ($1,423), down 1.1%, often including meager government aid. . However, Yoon’s administration already plans to cut 57 trillion won ($44.8 billion) in social spending over the next five years.
In February, Statistics Korea reported that in 2020, the median monthly wage in South Korea was just 2.42 million won ($1,902). Workers paid between 1.5 million won ($1,179) and 2.5 million won ($1,965) made up the highest percentage of earners at 27.9%. 24.1% of workers earned less than 1.5 million won. 17.1% earned between 2.5 and 3.5 million won (US$2,751), all totaling 69.1%.
In addition, 3.2 million hourly workers last year were paid less than the legal minimum wage, then set at 8,720 won ($6.90). Large companies have seized on it to demand a reduction of the already derisory amount. The KEF said in April: “This figure indicates that the increase in the minimum wage is not accepted in the labor market”.
Conditions are now aggravated by the impact of the US-NATO proxy war in Ukraine. Inflation rose sharply, reaching 4.8% in April, the highest in 13 years, driven by soaring prices for petroleum products. Truckers, for example, are experiencing a huge increase in costs, which are passed on to them by their companies.
A truck driver told the media, “Before, when I filled up, it cost me 250 to 260,000 won ($197 to $204). But now it costs me 350,000 won ($275). Drivers belonging to the KCTU-affiliated Cargo Truckers Solidarity are threatening to strike next month if they do not receive support measures.
With the official unemployment rate at an all-time high of 2.7%, it obscures the reality facing workers, especially young workers. According to Statistics Korea, at the end of 2021, the actual unemployment rate stood at 11%, which includes the underemployed and those who have given up looking for work. The Korean Employment Information Service reported in December that nearly 1.59 million people aged 15 to 29, or one-fifth, were classified as not in employment, education or training ( NEET).
Many young people now find themselves employed in the highly unstable gig economy, with no job protections or other benefits. The Chosun Ilbo reported that during the COVID-19 pandemic, the number of workers in the gig economy, which includes jobs like food delivery, nearly tripled to about 660,000. These conditions will only continue to deteriorate under Yoon.