After the 29 of June, 1987, the day of the Declaration of Democratization, Korean organized labor movements suddenly became active, having an immediate impact on Korea’s social order and economic condition. This paper analyzes the causes behind this sudden activity and examines the resulting changes in labor policy, labor laws, patterns of economic growth, the firm’s business strategies, and the impact of these changes on Korean organized labor. To improve the competitiveness of Korean exports in the world market, Korean laborers have worked longer hours per month and have been paid less per hour than laborers from most other industrialized countries. The difficult working conditions in Korea, coupled with poor management / labor relations, have resulted in a history of difficult labor disputes. During periods of dispute, with a few exceptions, government labor regulations and the support for the labor’s rights have been weakened, leaving labor with fewer and fewer legal means for defending its interests. During the legal holiday of the summer of 1987, Korean unions began to fight for improved labor rights. Many new unions were quickly organized, including new white-collar unions as well as traditional blue-collar organizations. Most unions immediately demanded wage increases and applied additional pressure by going out on strike before beginning contract negotiations with management. Under the pressure of a serious labor crisis, which was threatening economic growth and social order, the Korean government began to intervene in support of labor. Immediate actions included stronger enforcement of existing labor laws and protection of labor’s legal rights. Also, amendments were made to the labor laws which increased labor’s protection against government interference, mandated improved labor conditions, and increased penalties for labor law violations. Korea’s recent experiences indicate that increasingly assertive labor movements can have both negative and positive effects on a nation’s economy. In the short-term, Korea’s GNP growth rate and the rate of growth of exports have both slowed; employment growth is almost zero; wages have risen; and prices are headed generally upward. While it seems unlikely that labor activism is the sole cause of Korea’s economic problems, the conflicts between labor and management, and the resulting settlements have certainly had their economic impact. Also, beyond the obviously negative short-term effects on economic output, labor’s new assertiveness may have contributed to longer-term productivity growth by encouraging expedited investment in automated manufacturing equipment. This paper concludes by proposing the following approach to organized labor in Taiwan: (1) government should create effective labor law enforcement mechanisms as soon as possible: (2) entrepreneurs and business people need to update their philosophies of management and labor relations: (3) the organization of labor unions should be normalized: (4) both labor and management must develop the art of sincere negotiation: and, (5) an effort should be made to preserve the purity of the labor movement as a vehicle to legally enhance and protect the rights of its membership.
