Shorter Working Week Fails to Stimulate Job Growth

The shortening of Korea's notoriously grueling working hours has eased the lives of some securely employed salarymen and -women but signally failed to create more jobs to make up for lost hours.

When Kim Young-joo was labor minister in June last year, she said the new 52-hour working week "will lead to job creation especially among young people." The Korea Labor Institute, which is affiliated with the ministry, forecast that 132,000 jobs would be created by 2021.

But those hopes have not been met. According to Statistics Korea, the number of people employed by firms with more than 300 workers, where the new working-hour cap has now been implemented, grew only by 24,000 to 2.58 million in May, from 2.55 million a year earlier.

It is difficult to assess the exact impact, but a closer look at the jobs that were created shows that most of them are part-time, temporary positions. The number of employed people increased by 258,000 in May compared to the same month last year. But the number who work more than 36 hours plunged by a whopping 382,000, while those who work less than 17 hours increased by 350,000.

The reason seems to be that employers have responded to the 52-hour cap by turning to automation and cost-cutting instead of hiring more staff to make up for any shortfall.

One 29-year-old worker in a chemical factory in Chungcheong Province admits he now works fewer hours overtime. But the factory shifted its two-person/double shift system to a one-person/triple shift system, and he complains that the decreased number of workers has left him working harder for less money.

"If the government's aim was to get employers to hire more workers, it should have made it mandatory to do so," he said.

Experts now expect the shorter working week to lead to a sharp decline in available jobs. The Korea Economic Research Institute said, "Without an increase in productivity and capital operation rates, the shortened working hours will lead to the loss of 103,000 jobs this year and 233,000 in 2020."

The Pi-Touch Institute, a private think tank, projected around 221,000 manual labor jobs, including sorting and packaging, to be lost.

"If working hours decrease while businesses have no other ways to improve productivity and profitability, it won't lead to job creation," says Kim Tae-gi at Dankook University. "Without an economic recovery and productivity growth, the policy won't be effective."