‘Zero irregular’ policy worries manufacturers

President Moon Jae-in’s push for “zero irregular workers” in the public sector has put manufacturers in a quandary as many of them can ill-afford to follow suit, company officials said Tuesday.

The Moon government is not directly demanding private companies convert irregular workers to regular ones, but they cannot ignore the obvious pressure.

In particular, carmakers, shipbuilders, steelmakers and other manufacturers will see wages jump dramatically if they hire subcontracted or irregular workers as regular employees.

Hyundai Motor Vice Chairman Yoon Yeo-chul promised this week the company will complete its plan to hire 6,000 subcontracted workers as regular employees this year.

“We’ve converted 5,700 subcontract workers to regular ones over the past five years, and will hire 300 more (regular workers) this year,” the vice chairman said at the 2017 Hyundai-Kia Partners Job Fair at COEX in Seoul, Monday.

Despite Hyundai’s efforts, however, some workers filed lawsuits against the country’s top carmaker, demanding it acknowledge their employment status and pay higher salaries.

“We cannot acknowledge their positions, due to various reasons including cost issues,” a Hyundai Motor official said.

Shipbuilders and other manufacturers are facing more pressure than carmakers.

Industry officials point out the government’s campaign to turn irregular workers into regular ones may deal a severe blow to both manufacturing and services companies, as wage costs would surge amid sluggish business.

The number of subcontracted workers working for Korean shipbuilders is usually double to triple the number of regular workers.

Daewoo Shipbuilding & Marine Engineering (DSME), for example, had 10,370 regular workers in the first quarter of this year, while the number of subcontracted workers stood at 25,000.

Things are similar for builders, who have almost as many irregular workers as regular ones, according to the Construction Economy Research Institute of Korea.

POSCO, Hyundai Steel and other steelmakers also face similar problems.

The companies are seemingly struggling to afford to make irregular workers regular ones, but they remain reluctant to complain to the government, which has put top priority on reducing the irregular workforce.

The Korea Employers Federation (KEF) has delayed a plan to publish a booklet that deals with irregular workers, after its criticism of Moon’s labor policy came under fire from the public and the government.