(EDITORIAL from the JoongAng Daily on May 8)

Crisis at public companies

The lack of morality among labor and management personnel at state-owned
companies is serious. A report on labor and management at public companies by the
Ministry of Strategy and Finance found that labor unions were given special
treatment in terms of hiring, staff reorganization, personnel evaluations and
promotions.

According to the Finance Ministry, an employee at a public institution earns an
annual salary that is 66 percent higher than that of someone working in the
private sector.
Profitability of state-owned companies is still 30 percent less than companies
that are privately owned. And the people working there continue to be involved in
a seemingly endless number of crimes and scandals. Two factors are to blame here:
reckless management and pressure from labor unions that are six times the size of
unions in the private sector.
But that???s not all. Managers have refused to acknowledge complaints from
employees about unreasonable wages and working conditions. Negotiations between
labor and management are also a problem.
Meanwhile, it???s been said that managers are collaborating with the labor unions
to keep their jobs. This is irresponsible management at its worst. How long will
taxpayers have to pay the price for this kind of behavior?
The nation???s two largest umbrella labor unions have come out strongly against
reform in the public sector. But it is doubtful whether their opposition
originates from a clear understanding of the situation. The government should not
delay current plans to restructure some public institutions and privatize others.
It is important that it not lose momentum on this issue, or it will get lost in
the shuffle amid the current economic conditions facing the government and the
nation. It will also be necessary to strengthen the auditing system for public
companies.
What have our oversight organizations been doing to allow the situation to reach
this point? Why didn???t their internal supervisory departments do anything to
prevent this?
The Board of Audit and Inspection said recently that it would examine not only
the reforms under way at public companies but also the institutions in charge of
overseeing the restructuring schemes.
Though this is important work, activities like these should not end only with a
report that is filed away. Some of the actions committed are not much different
from criminal activities. Authorities must investigate and take legal action.
(END)