South Korean Unions Strike to Protest New Labor Law

Striking workers from unions representing 1.7 million members shut down much of South Korea’s economy today in escalating protests against a new labor law and feared threats to civil liberties.

The main target of worker fury was a law passed in a secretive predawn parliamentary session Thursday that makes it easier for employers to lay off workers and to hire replacements for strikers.

Another law rushed through the National Assembly on Thursday in a lightning-fast session attended only by members of the ruling New Korea Party gives greater investigative powers to the National Security Planning Agency, South Korea’s equivalent of the CIA.

President Kim Young Sam’s government argued that the bills were necessary to boost South Korea’s economy and guard against threats from Communist North Korea.

But labor leaders and opposition politicians charged that the government was taking away workers’ rights to job security, blocking union organizing and seeking to suppress legitimate dissent.

Nearly 150,000 workers from a technically illegal union with 500,000 members went on strike Thursday, with many more joining this morning. Another union with 1.2 million members called for an indefinite work stoppage starting this afternoon. Together, the two unions’ actions could devastate South Korea’s economy.

“Negative reaction from the unions was expected, but not to this extent,” said Lee Dae Chang, an analyst at Kia Economic Research Institute. “The outlawed Korea Democratic Confederation of Trade Unions had been rather cooperative with the government with the hope that the type of labor system typical of advanced countries would be introduced to Korea . . . but now they feel they have been betrayed.”

Thursday’s strike idled more than 100 major South Korean companies, including the nation’s leading auto maker, Hyundai Motor Co., and the world’s largest shipyard. An additional 32 major businesses were shut down this morning, while strikes starting this afternoon could affect about 5,500 other firms. Transportation workers also threatened strikes across the nation starting Saturday.

The stage has been set for a potentially bruising battle between labor on one side and business and government on the other that some fear could last for months.

The Korea composite stock price index, reflecting those concerns, dropped 2.8% Thursday to close at 659.01, its lowest level in 45 months.

The government of President Kim Young Sam issued a statement threatening “stern countermeasures” against illegal strikes.

But Kwon Young Gil, president of the Korea Democratic Confederation of Trade Unions--or KDCTU, an organization that is officially banned but in practice is allowed to exist--declared that if force is used to end the strikes, “then we will fight to bring down the Kim Young Sam government.”

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Kwon vowed to keep up pressure on the government until presidential elections set for next December unless the new labor law is nullified.

Kim is banned by the constitution from seeking a second term but is expected to back a handpicked candidate.

The Daewoo Economic Research Institute predicted that if serious labor strife continues next year, it could limit 1997 economic growth to about 5.6%, compared with an official target of 7% and growth this year estimated at 6.8%.

The new labor law makes it easier for companies to lay off workers, provides for more flexible working hours and postpones broader legalization of union activities to 2000.

Some analysts said even if labor strife hurts the economy in the short run, the law’s impact will be beneficial to businesses over the longer term by giving them more freedom to cut costs.

“It seems the government has actually honestly tried to put together a [labor law] package that will appeal to both sides and eventually help the Korean economy,” said Cho Dong Sung, an economics professor at Seoul National University. “But the problem is it looks like a zero-sum game, and the passages that help management do not appeal to labor. For certain work sites such as shipyards and auto plants, where they have strong labor unions, there are chances of a prolonged strike.”

Nine other bills were also rushed through the National Assembly in a 5 a.m. session that was announced only to ruling-party members.

With the country facing a record $20-billion trade deficit this year, double that of 1995, major disruption of production in auto or other export industries could worsen an already serious trade imbalance. About 40% of Korea’s auto production is for export.

Chi Jung Nam of The Times’ Seoul Bureau contributed to this report.