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Wage hikes larger in independent union plants
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A study of 6,561 plants nationwide has shown that ones having independent labor unions saw larger wage growth than plants with workers affiliated with the two existing umbrella unions

The study, conducted by the JoongAng Ilbo and the Labor Ministry, also showed fewer cases of labor-management disputes in factories with independent unions.

The wage growth rate in workplaces with independent laborers was between 5.2 and 6.8 percent during a three-year period. Unionized workers under the Federation of Korean Trade Unions saw the rate of growth decrease from 4.5 to 3.9 percent while unionists affiliated to the Korean Confederation of Trade Unions saw a rate growth of 4.5 to 4.7 percent. In the first half of this year, wage growth in workplaces with no unionized laborers was 2 percent. Wage growth for unionists under the FKTU, independent workers and members under KCTU were 0.9, 0.8 and 0.5 percent, respectively.

¡°The reason why the rate for plants with independent laborers placed third this year is that those workers had voluntarily either frozen or cut wages,¡± said Kwon Hyuk-tae, a head of the Labor-Management Conflict Handling Division at Labor Ministry. ¡°The wage growth rate for independent workers is likely to surpass that of workers under FKTU when laborers of independent unions receive incentives by the end of this year.¡±

The study shows that plants under the KCTU witnessed over 100 labor-management disputes yearly since 2007. So far this year, there have been 38 disputes. Only two cases of labor disputes within factories with independent unionists occurred in 2007 and there were none last year. This year has seen one case. ¡°When we were under the KCTU until last March, we were ordered to stage strikes for the sake of the group¡¯s interest,¡± said Kim Ju-seok, head of a labor union at Ulsan NCC, a petrochemical product-making company. ¡°The KCTU did not consider issues within our firm.¡±

Unionized workers of Simpac ANC, a ferro-alloy maker, in Pohang, North Gyeongsang, staged strikes demanding the end of layoffs from 1998 to 2005 when the company was under bankruptcy protection. From time to time, Simpac unionized workers were either mobilized to support KCTU¡¯s political activities or that of other labor unions.

However, each Simpac worker received incentives worth 10 million won ($8,090) and company shares at the end of last year due to increased profits since unionists withdrew from the KCTU in January of last year. It was the first incentive in 10 years. Nam Ho-ki, 48, who has worked at the firm for 22 years, said workers once received nothing despite past profits. He said employees now believe there will be compensation if they work hard.

¡°While the company suffered from a deficit in the first half of this year due to the economic downturn, unionized workers first suggested a wage freeze,¡± said Choi Jin-shik, chairman of Simpac. ¡°The firm will do its upmost to run the business successfully so that management can offer workers incentives by the end of this year.¡±

Some said that changing characteristics of labor-management relations in Simpac are largely influenced by its labor union¡¯s withdrawal of membership from the KCTU. All the unionists voted in favor of the withdrawal.

The operation rate at Simpac was at 50 percent or lower before its union left the KCTU. It increased to 99 percent by the end of last year. The company was able to offer incentives to employees since the profits increased.

¡°The reason why wage growth is high among plants with either independent or no unions is that the more labor and management cooperate, the more profits they earn,¡± said Kim Dong-one, a business professor of Korea University in Seongbuk, Seoul.

By Kim Ki-chan, Chang Chung-hoon [smartpower@joongang.co.kr]
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