Changes in Korean Labor Market Regimes

By exploring the extent to which the South Korean labor market and labor deployment in production processes have changed since the 1997 financial crisis, this article criticizes the prevalent views regarding national adjustments, including neoliberalism and rigid leftism. Korean adjustments in the labor market are characterized by a dual structure of regular and irregular employment. Unlike AngloSaxon free markets, the Korean regular employment system is still very rigid due to its organized labor. However, Korea has not developed the functional flexibility or close collaborative skill formation and work organization as Germany and Japan have. In order to increase flexibility, Korean corporations, instead, introduced irregular and part-time work into the system, as the Netherlands did. However, Korea differs from the Netherlands in the sense that it failed to develop society-wide protections for irregular workers. The Korean adjustment process since the 1997 financial crisis shows that its path is not only toward one direction. Therefore, Korean adjustments cannot be explained by the neoliberal perspective that the Anglo-Saxon-style free market system is universally relevant regardless of the national institutional context, or by the rigid leftist perspective that Korean current readjustments toward a flexible system under globalization follow the neoliberal, free-market model. Further, this article argues that the diversity of national adjustments is not due to the path-dependent persistence of national development, but to the outcome of politics by main players.