(News Focus) Job sharing, new watchword for troubled Korea Inc.

SEOUL, Feb. 26 (Yonhap) -- As a severe global economic slump is taking a heavy
toll on South Korea, market heavyweights Samsung Electronics Co. and Hyundai
Motor Co. have taken the lead in slashing wages for entry-level college
graduates.
The moves are part of a "job sharing" program aimed at averting American-style
layoffs and redirecting savings from the wage cuts into hiring more workers.
A growing number of private firms and state-run companies in South Korea are
adopting the new employment doctrine, as the country is struggling to avert what
would be its first recession in over a decade.
The program is also gaining acceptance due to the nation's labor laws which, in
addition to resistance from labor unions, make it difficult for employers to fire
full-time workers because of generous severance payments.
Proponents say the idea of job-sharing is the best option to avoid temporary
layoffs and alleviate youth unemployment, but opponents dismiss it as a
euphemistic way to reduce wages and simply pass the cost of creating jobs on to
new recruits.
"The job-sharing program is merely a scheme by big businesses to trim the wages
of regular, full-time employees," said Woo Moon-sook, a spokeswoman at the Korean
Confederation of Trade Unions, one of two major umbrella union groups.
"It's just a matter of time before employers spread the wage cut to all of their
employees," she said.
On Wednesday, the nation's top 30 business conglomerates, including Samsung, LG,
Hyundai Motor and SK, said they plan to cut entry-level salaries for new
employees by as much as 28 percent.
Samsung Electronics reportedly plans to reduce annual wages for new hires by an
average seven percent, to 26 million won (US$17,184) from the current 28 million
won, according to local news reports. As for Hyundai Motor, the wages will be cut
to 29.7 million won from 34 million won.
The move came a week after the government said it plans to reduce annual wages
for university graduates employed by 299 state-run firms to between 20 million
won and 30 million won from the current maximum of 40 million won.
"Big businesses can't ignore the trend of job-sharing any more," said Chung
Byung-cheol, vice chairman of the Federation of Korean Industries, the nation's
top business lobby representing the interests of the conglomerates.
Hanwha Group, the nation's 10th-largest conglomerate, plans to hire 300 interns
this year after it cut executives' pay by 10 percent.
Chang Il-hyung, a spokesman at Hanwha, said the plan "demonstrates our corporate
social responsibility."
Hammered by the global economic crisis, the nation's economy grew 2.5 percent
last year, compared with a 5.1-percent expansion in 2007.
The government has predicted the economy will shrink by two percent this year.
The International Monetary Fund, however, offered a more pessimistic forecast of
a 4-percent contraction and Swiss brokerage firm Credit Suisse is predicting a
contraction of as much as 7 percent.
The job market is among the first sectors to be hit amid the deepening economic
woes. In January, the nation lost more than 100,000 jobs, or 0.4 percent of the
total, marking the biggest contraction in more than five years.
Still, the nation's jobless rate stood at a relatively stable 3.3 percent in
January, but analysts say the number does not fully reflect the weak status of
the economy.
First-time job seekers were roughly divided over the idea of cutting wages for
new hires to employ more workers.
According to a recent survey by an online employment portal, Career.com, 60.4
percent of the 1,017 respondents said they support the idea, but 39.2 percent
opposed it, saying it would have little success in creating jobs.
Among those polled, 39.3 percent criticized employers for passing the burden of
the economic crisis on to new hires.
Job sharing "is a stop-gap measure that, in the long term, may create more
problems," said the Korea Herald in an editorial on Thursday.
"The pay differential between this year's new recruits and employees who joined
the company last year will not be justifiable," the editorial said. "It will also
damage organizational unity to have employees work on different pay scales."
Some first-time job seekers are calling for companies to reduce the wages of
existing employees to share the burden of the economic crisis.
"It's too harsh for new hires," said 25-year-old job seeker Bae Jin-kyung.
"At first, big businesses should cut the pay for executive-level officials as
much as possible and increase new hirings," she said.
(END)