(EDITORIAL from the Korea Times on May 2)

Is Party Still Going On?
-State Enterprises Lavish on Wages, Welfare Benefits-

The nation's state-run corporations have long been called dinosaurs living on
taxpayer money. It is really hard for them to give up their vested interests even
at a time when drastic restructuring is required to ride out the unprecedented
global financial and economic crisis. It seems that they have just scoffed at
President Lee Myung-bak's public sector reform that was unveiled last year.

According to the Ministry of Strategy and Finance, 297 state enterprises suffered
from a 57-percent fall in their combined net profit in 2008, mainly due to the
worldwide crisis and soaring prices of crude oil and other raw materials. Their
aggregate debt jumped 16.2 percent to 320.7 trillion won. They have already been
criticized for their loss-making operations, lack of efficiency, low
productivity, bloated structures, managerial incompetence, bureaucracy and
corruption.
It is exceedingly regrettable that state-owned businesses have failed to change
themselves to emerge as entities truly serving the public. Their managers and
employees have only been trying to protect their own interests at the sacrifice
of the public good. They are still engrossed on sticking to their positions,
raising their salaries and getting more welfare benefits. In short, they are
still having a lavish party and wasting away taxpayer money, while private sector
workers are faced with steep wage cuts and job losses.
The ministry said Thursday that non-executive level workers at the 297 state-run
firms earned an average 55 million won last year, up 3 percent from a year
earlier. Especially, average wages at the Korea Development Bank (KDB), Korea
Securities Depository (KDS) and 12 other high-paying corporations stood at over
80 million won ($62,400).
What's more of a surprise is that 67 of the state enterprises provided a combined
170 billion won in housing subsidies to their employees, 42 percent more than in
2007. And 167 corporations also provided 130.5 billion won in preferential loans
for tuition for employees and their children, up 10 percent from the previous
year.
State-run corporations have often been described as "godsends" for their
employees who can rake in undue salaries regardless of their job performance and
their firms' earnings. Structural problems of the corporations have aggravated
their situations. The ruling elite has usually attempted to control state-owned
firms by appointing close confidants of the President and other political
heavyweights.
Such ``politically-parachuted'' executives have no other choice but to placate
employees, especially unionized workers, with sumptuous wage hikes and more
fringe benefits in order to maintain their positions. Thus, this bad practice
should be removed so that state-run businesses can transform themselves into
better-serving public entities. The authorities should no longer drag their feet
on reforming state enterprises.
(END)