Republic of Korea’s Pursuit of a 40-Hour Work Week
By admin March 1, 2018

This week, the Republic of Korea passed a law to reduce the standard work week in an effort to improve quality of life and boost employment. The bill, which cut the maximum weekly work hours from 68 to 52, will initially apply to large companies in July 2018, before it is rolled out to smaller businesses. The new Korean work-week will consist of 40 normal hours and an additional 12 hours of overtime. The reduction in the maximum work week was a campaign promise by President Moon Jae-in, who also secured a 16 percent increase in the hourly minimum wage earlier this year. However, the balance between the anticipated benefits of a decreased mandatory work week and the costs of equal distribution affects, remains unclear. Furthermore, the added challenge of enforcing the new work week will have to face the government’s historic poor oversight and loosely related effects on some income levels in the Republic of Korea, according to the International Labour Organization (ILO) report Working Time Around the World.


The law faced opposition from businesses but was seen as necessary to improve living standards, create more jobs, and boost productivity. It is also aimed at increasing the country’s birth rate, which hit record lows last year. The law is anticipated to cost businesses an additional 12 trillion won ($11 billion USD) a year to maintain the same levels of production, according to a study by the Korean Economic Research Institute. However, the shift in the political dialogue surrounding the law has evolved from the traditional focus on economic productivity, to highlight the “real culprit of the problem—the vast gender disparity and inhumanely long working hours,” according to Korea’s family minister Chung Hyun Back.


The trade-off between working less hours per week and increase in leisure time, may have unintended consequences for Korean households. The relationship between shorter work weeks and increase employment rates does not directly translate to a rise in gross income per household based on macroeconomics’ production approach to GDP. On the contrary, as a result of the decreased work week, many Koreans may find themselves with less household income. Although President Jae-in has increased the hourly minimum wage by 16 percent, the law decreased the work week hours by 23 percent. Additionally, the increase in minimum wage does not have reverberating affects across all income levels, meaning higher than minimum wage income levels will feel the decrease work week parity more severely. The overall question remains, with the likely decrease in gross income, will Koreans feel more secure to expand their families?


Moreover, the reduction in the Republic of Korea’s maximum work week highlights the larger regional polarization between lower and higher limits to work weeks within Asian countries, where the general work hours limit has continued to stay around 48 hours. The long working hours are common in the Asian region, where the long hours went hand-in-hand within the country’s booming economy in the 1980s and 1990s. Historically, the rapid economic growth and productivity benefits have contributed to the rising real wages in Korea, according to National Public Radio. However, as Korea has shifted its political focus from economic productivity towards increasing social welfare with the change in the maximum work week, the intended benefits may still be unclear.


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