July 16, 2018 12:21
The 52-hour working week could result in the loss of 336,000 jobs by 2020, a study by the Korea Economic Research Institute out Sunday claims.
"Unless productivity and capital utilization improve, 103,000 jobs will be lost next year and another 233,000 will disappear by 2020," it said.
The government hopes that businesses will have no choice but to hire more workers once the shorter working week goes into effect, but KERI projects the exact opposite assuming productivity remains at its current sluggish levels.
Shorter working hours are generally expected to improve productivity because workers are less exhausted. But KERI said, "An inflexible labor market, a pay step system and hardline labor unions make it tough to lower wages in spite of the reduced working hours, while hourly pay rises considerably."
"Businesses will have to hike prices to meet the raised hourly wages of workers, but that will cause sales to decline resulting in a decline in earnings and a shrinking number of jobs," it added.
KERI forecast that the number of regular workers will drop by 132,600 by 2020 and temporary jobs by 100,700. Some 172,000 of them will disappear in small- and mid-sized companies, 93,300 being temporary ones, and the rest at major conglomerates.
"Shortened working hours will lead to a marked decline in the number of temporary jobs in small and mid-sized companies resulting in a widening income disparity," it said.
But the state-run Korea Labor Institute in a report last month said up to 132,000 jobs will be created by 2021 due to the shorter working week. The KLI tabulated the amount of work exceeding 52 hours a week based on the Labor Ministry's working hours data compiled last year and used it to deduce the possible number of jobs that can be created.
KERI said, "Shorter working hours impact wages, product prices and labor supply and demand, but these factors were not considered comprehensively" in the KLI report.
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