We are not trying to deny that companies have to do well for the economy to do well. In competing to maximize profit companies engage in "creative destruction." The problem is "destruction" that does not lead to "creation." The added value companies produce goes not only to shareholders but also to workers' wages and to be paid as taxes. When wages decrease and the portion that goes to shareholders increases, that has nothing to do with the increase in added value.
According to Bank of Korea figures, the ratio of added value produced over the past year that went to workers' income dropped to 58.8 percent, down from 59.8 percent in 2003. It is suffering enough that workers receive less, but it is also undesirable in that it hurts domestic consumption to have that happen, consumption that is needed to have a positive economic flow. The 6 continuous quarters of lessening private consumption since the second quarter of 2003 have been mainly a result of poor household consumption.
Of course the solution will not be all that simple. Encouraging companies that exist to make profit to increase wages so as to carry out their social responsibilities is useless if they do not follow through. What is important is balancing the labor-business relationship. Workers have never before been in such an unstable employment situation as they are now. Government policy has to focus on resolving that problem. There are many things about the labor market that will have to be made more flexible, but right now is not the time to talk about flexibility that is disadvantageous to workers, because the current improvements in the economy will be hard to maintain unless there is an increase in household income. It is important that union members work for the benefit of all workers and not just members of their unions, but the government must not blame unions for the problem.
The Hankyoreh, 5 April 2005.
[Translations by Seoul Selection (PMS)]
