Why Koreans Are Angry: The Social Cost of Spectacular Growth

The-Human-Cost-Of-Over-Competition

From Daum:

Intensifying competition and an absence of social cooperation exhaust and anger Koreans

Behind the spectacular economic growth of South Korea lies the growing toll on society.

After the Asian Financial crisis, the corporations’ balance sheets have become healthier than ever before. The proportion of GDP produced by top-ten corporations grew from 55.1% in 2008 (564 trillion Won/ USD) to 75.6% in 2010. Indeed, fierce internal and external competition since the crisis has produced robust firms. However, behind this success story lies an untold human and social cost. Perpetual structural adjustment, expansion of temporary employment, encroachment against small/medium firms by large firms have led to the attrition of the Korean middle-class. The international competitiveness table has made the people’s lives unstable and uncertain.

The sadness of temporary workers

Mr. Kim (36) tried for the Administrative Official Exam and the 7th Grade Public Officials Exam, thinking it was a relatively impartial competition. But he gave up eventually after 4 years and the temporary teaching position he held at the private academic institute became his ‘career’. He taught in a small after-school academic institute for middle and high-school students, and during the entrance exam period taught additional essay-writing classes. Working as a private instructor and salesperson at a large supermarket, his income hovered between 700,000-800,000 Won ($700-800 USD).

The-Cost-of-Unlimited-Competition

Having never signed an employment contract, he worked on and off for 11 years. He applied for temporary teachings position at middle and high-schoosl but no demand existed. He had a short break in 2010, filling in for a sick-leave position as a substitute teacher. His position was entirely contingent upon the duration of the person’s sick-leave. He left 2 weeks short of 6 months, the minimum period required for unemployment benefit eligibility.

13 years after graduation from university, other than his 10,000,000 Won ($10,000 USD) key-money deposit, he has no other asset. Try as he might, he was unable to break out of his temporary employment status and is now resigned to his fate. He ruefully reflected on what he missed, but he ‘has accepted that he will never be a permanent employee anywhere.’

‘Competing against the large corporation’ – the life of failed small business owner

Mr. Lim (52) started a small supermarket in Gyeonggi-do Goyang-si after the collapse of his company during the 1997 Financial Crisis. In addition to his own 10,000,000 won ($10,000 USD), he had to borrow from his friends and relatives. His luck began to wane after two super-sized marts started business nearby. He tried to stay afloat by slashing prices, but a crushing blow dealt by another ‘super supermarket’ opened up across from his store, the addition of a 24/7 convenience store and six other small stores was simply beyond him. His landlord asked him to vacate the premise recently.

‘I have not been able to attend any of my parents’ birthdays and never took a day off for the last 16 years, but all I have left is debt worth 50,000,000 won ($50,000 USD),’ says Mr. Lim. He is dismissive of the talk of ‘mutual-supportive existence’, ‘symbiotic growth’ promoted by South Korean politicians as blatant lies.

Restructuring ‘family-like colleagues’

Mr. Ban Ki-ryong (51) worked as a KT Customers Services department manager in Chungbook, but nowadays he is on nine different kind of drugs since his retirement three years ago due to severe depression. Although he survived the cuts, he was in charge of carrying out the restructuring.

‘According to the C-grade Player scheme, I managed those with sub-par performance,’ Mr. Ban says. ‘With the set-quota to fill, I had to monitor and report on every single little detail of the workers under my watch, including how often they were late, how often they came back late from lunch, whether they had any issues with the customers on a monthly basis. We drilled them every quarter with exams. And just because you did well on the exam did not mean you were saved.’

One of his ‘restructurees’ was from his alma mater, 7 years his junior. ‘I suffered personally, and he and I became bitter enemies. In my alumni circle, I am labeled as a scumbag.’ After his graduation from Chungjoo University in 1984, he entered KT which was known for its family-like atmosphere and more popular than Samsung back then. But after privatization, the sole virtue was ‘competition’ and ‘mutual-elimination,’ and no longer ‘mutual-support.’

A society where corporations prosper and people die

Competition-In-Education

According to the Korea Employment Information Service, the number of ‘restructurees’ bounced back to about 103,000, edging close to IMF crisis peak of 126,000. The ‘perpetual’ restructuring regime has meant that those who are laid off are crowding the labor market, with over 1 in 3 fallen into the condition of temporary employment. This is the model of ‘advanced’ management practice trumpeted by the labor-market reformer of the 2000s. However, those with temporary employment earn only 58% of the full-time employment with constant threat of unemployment hovering over their heads.

Opening small business has become just as difficult. In 2008, 33.9% of the working population run a small business, double that of the OECD average of 15.8%, and they are very likely to face stiff competition from large conglomerates crowding into the retail business. The growing opening of the domestic market to global competition and domestic privatisation has exposed everyone from CEO to elementary school to unlimited global competition. Young students focus on their CV and specs, while those ahead cannot relax from the constant pressure to be ‘one step ahead.’ In this age of competition there is no winner.

Comments from Daum:

insight:

Others’ failure = my happiness

아주 좋은 날:

If you wanted to change this situation, you should have voted! The implementation of neoliberal policies was the result of blinding support for the ruling Saenuri party, and we have supported them over and over again in election. And now you complain about how they do not understand your pain? The only conceivable change that could be wrought is through high voter-turnout but I am sure not a lot of you will turn out at the booth and then turn around and complain about it for the next five years.

와닷:

This is really because of 2MB~ The rich gets richer and the poor gets poorer. Conglomerate-centered policy is the problem in South Korea.

바룸:

If you eliminate any of the E-Marts, Home Plus and Lotte Marts, Main Street business will boom. They are sucking dry the main street economy by their quasi-monopolistic grip on everything they sell, and that leads to decrease in personal income, depressing in domestic economy. Even if there is contraction in domestic consumption, large retailers could squeeze on medium and small businesses to maintain their profit margin. We have to recognise that they are behind our collective pain.

마그누스:

Living is so hard now. I cannot save a dime and all social occasions drain all my savings. My heart chokes every time. Money chokes me and this society chokes me and all the politicians choke me. Thanks goes to 2MB who taught me the important lesson on politics.

alclsskfk:

Hey slaves, stop bitching and get to work~~

크흥:

Why? Why do poor people vote for the rich? Why do they believe their lies all the time? Why? Why do they not know that they are being exploited? And why can’t they only complain?

의리있는놈:

This is all because of the incompetent Democrats’ fault and their shit-progressive policies. The IMF crisis made two very wrong people into presidents and it made the underclass’s life harder. Incompetent Gae Dae-joong and Noeh Mool-hyun [note: the netizen is deliberately misspelling the names of late presidents Kim Dae-jung and Roh Moo-hyun. ‘Gae’ means god in Korean and ‘Noeh’ means bribe, thus referring to the unproven charges of bribery that led to Roh’s eventual suicide in 2009].

진빈:

The true winner of this competition is foreign migrant workers and corporations… Foreign migrant workers can turn their lives around after a few years of hardship in this country and the corporations profit by driving our wages down and forcing us to compete with migrant workers….

이카루스:

Leaving home at six in the morning to go to work, my wife will follow me soon after. My kid in college, I worry about his future, and I see no way out…. This place forces me to live without any dignity.

여름수채화:

Now even the president is a slave to large corporations. Not a slave to North Korea, but to large conglomerates… We need a president with courage to heal the polarisation of the social classes. Or we face a fate worse than that of North Korea… a place without any hope.

박영철:

This country belongs to large conglomerates.. Businessmen pay off politicians and in turn those politicians side with large conglomerates… Now those conglomerates try to squeeze out small retailers out of main street. Later they buy out land and set up warehouse-style stores.

웁스람:

Fine, I take your point. Undemocratic elements have changed our society into a more competition-centered one, and the MB administration has not done such a good job of slowing it down. But let me ask you haters a question – what did Roh Moo-hyun and Kim Dae-jung do when they HAD the opportunity to reform this country, during the IMF crisis? Was that ten year not long enough for you? Blaming others is easy but they are still responsible for the opportunity-cost that they have squandered.

다우닝:

Large corporations and conglomerates live at the expense of people.. The specter of competition has actualised itself into an immovable social stratification.. And the corruption of the judiciary always works in favor of the big money. Entrenched corruption, loss of hope, and inertia – they need to be cleaned out and that is the only way we can save ourselves.

insight:

In this jungle of capitalism, the only rule worth bearing in mind is that the strong survives and the weak dies out. To knock over one’s competitor is to survive. The tears of others is nectar to me.

세잎클러버77:

Slaves ought to shut up. Who voted for the party of big money and military-service evaders, the party of Filipinos and migrant workers, the party of Gyeongsang province? Fuck it, let’s all die together, you people make my children suffer, you morons.

민주지산:

Tax breaks for the riches, increase on indirect tax… isn’t that what we voted them in for? Idiots have to pay.

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  • Brett Sanbon

    Wanna make money in Korea? Start a church.

    On a serious note, small businesses are nearly impossible to keep afloat. Why do you think over 90% of small businesses fail within their first year in America? I must see the shops in Sanbon city center change out bi-weekly.

    One difficult thing about doing business in Korea is that copycats spring up all the time; and not in the next town or down the street, they open roght next to you or directly across with a bigger sign and cheaper prices. What should anyone expect?

    My opinion, research the market. Find a niche. Do something new. Too many people think if they start a business in a densely populated area, its bound to succeed. Anyone ever heard of a strategy? I went through 3 notebooks full of business ideas until I came up with the one I am going through with now. Took me 4 years to decide what to do, where to do it, and when to start. Its hard to hope the best for people’s small businesses when they set themselves up to fail.

    • Digitalsoju

      Yeah damn those copycats. Sit on their hands until someone else comes up with an idea for them, then go at it. I have no respect for those people.

      Everyone’s trying to sell that nasty tasting lemon aid on the streets now after it became a hit (for whatever reason).

      If I were a business owner, It’d piss me the hell off if a copycat sprang up across the street from me.

      • Brett Sanbon

        Haha! I love the lemonade with Hot 6. I think its called a “Lemon Bomb”.

    • Justin_C

      4 years to do the market research, takes 1 month for someone to copy you… :(

      yeah, small retail shops are difficult to survive wherever they may be, although i heard among all the ethnic minorities in the US, Korean immigrants represent the highest proportion of small business owners…. i wish i could pull out the figure from the detp. of labor but it was above and beyond even Chinese…..

      maybe the idea of being called Sajang-nim is so irresistible :p

      • Brett Sanbon

        4 years to do the market research, takes 1 month for someone to copy you…

        Yea, hopefully I have thought of something that would be impractical for other people to copy well, or even if they did there would be enough market share for all of us! :) Actually, the main goal goes along with what Ruaraidh wrote below; I want to beat out the giants who leave little room for small businesses to make a profit.

        maybe the idea of being called Sajang-nim is so irresistible

        Even though you may have written that half-jokingly, I can’t help but to agree. I would say 25% of my motivation came from seeing a problem for common people in Korea and wanting to fix it. Probably 25% is that I get to be the boss (the remaining 50% is that I find this field extremely interesting and it’s future is exciting). I’d imagine most people are the same.

        One big problem, aside from poor planning, is that people start their companies with money borrowed from friends and family. Those friends and family don’t question the business model or challenge it’s potential. Its almost like they want to lose their money…

    • Paul M

      …or start your own religion, just ask Rev. Moon’s family.

      One of the first things I noticed in Korea was how quickly businesses start up only to fold and get replaced with another which predictably folds soon after to be replaced with… etc. etc. I lived in one apartment block for 2 years and the ground floor started off as an independent convenience store “Morning Mart”, then it became a fishing equipment and bait shop, then it became a showroom for an interior designer.

      I think you’re right when you say that people start up businesses in populated areas and expect them to succeed without any real strategy or business model. You can’t just blame the economy for their failure.

    • 참을 수 없는 존재의 가벼움

      The novel, but lucrative idea is a real scarcity in opening a business. Too many self-employed men’s stores often go bust because of lack of strategy or experiences on how to get things done independently.

      Actually, finding a niche market is too difficult for guys on the main street. Corporate guys are doing research on what will be promising in businesses and on what is prospering but where no big firms set foot in.

      I hope your long-planned enterprise will be a vast success, with loyal regulars calling you Sajang-nim while you are standing at the cashier counter joyfully seeing around. Good luck :)

  • Patrick

    And they really think closing down Costco two Sundays a month will solve this problem.

  • Ruaraidh

    This is what happens when companies get large enough to distort the labour market, and too large for the government to challenge. This is also a reason that I think the international flow of labour should be strictly controlled. Importing very cheap labour is such a poor solution to inefficiency, that is if your aim is to increase overall national welfare.

  • 참을 수 없는 존재의 가벼움

    The time has come for the nation to think about an efficiency-first economic model, where less skilled, and less learned people are considered useless, thus paid according to their alleged small contribution to the national economy, and treated as if they are parts of a factory.

    By borrowing a US election phrase, I want to ask maket funamentalists of this: “Is South Korea better off than it was four years ago?”

    Competition in the market without a tightly weaved safty net which allows those who lagged behind others to get retraining and start anew, is suffocating the poor working class, planting a constant fear in the middle class that they might sink into the bottom of plight, and enrishing the upper class who use massive wealth to attain dominance over others, with often illegal means, as illustrated in the recent admission fraud case in international schools.

    Of course, wealth may be the outcome of a person’s painstaking efforts for success and fame. But here in Korea, the public distrust in wealth accumulation and a sens of frustutration from the knowledge that the way to success through efforts is strucuturally cordoned off when there is no connections and money, is producing increasingly noticeable side effects: the highest suicide rte among the OECD members, the lowest satisfaction level, and the longest working hours, the continuous occurence of blatant sexual crimes, and the chronic school violence driving students to suicide, together with an educational climate of assessing students only by their scores.

    The upcoming December presidential election is crucial in that a future president will decide upon whether to continue the ominous course to national suicide or to abandon the existing tack for a country of opportunities for all.

    • Cuddycream

      The problem is that even if Korea began to take steps to make life and society fairer and more dignified for the middle and working classes, it would rapidly find itself out of step with the rest of the globalised economy and become utterly uncompetitive. Just look at the European countries now which are seeing serious unrest as they have to unravel their worker protection statutes due to being completely uncompetitive.

      • 참을 수 없는 존재의 가벼움

        You get me wrong.

        It is not my point that the government should lavish their welfare benefits upon less skilled workers and the unemployed and bash big corporations.

        In short, I has vigorously championed the equal opportunies, stubbornly oppose equality in results, which I think you misunderstand as my argument.

        The government failures, blamed for the ongoing European deb crisis, like chronic fiscal deficit, present grave problems to the government, but equally problematic is that the market often malfunctions, enriching the few powerful players that often abuse its superior powers over small players, which is particularly the case in Korea, where chaebol is suffocating small-and medium-sized enterprises by abusing itsstatus of dominant marekt-share holders, not by promoting fair competition with other players in the market.

        At this point, it would be good to keep in mind where and why the 2008 global financial cisis broke out– unregulated financial institutions’ speculations with financial derivatives that are too complicated interconnected to gauge the risk involved, in the United States.

        Now look at the reality South Korea faces. Have you ever seen people who live on welfare benefits and give up looking for jobs because the benefits are so generous to dissuade them from working again?

        Plus, the appalling low-quality education of public schools (making me wonder why US President Obama spoke highly of the Korean education), has denying potentially competent students the access to opportunties to demonstrate themsevles. State-led reforms to right a lot of wrongs will be inevitable. I think national competitivenss comes from the talented fostered with quality education, which is impossible due to the soaring costs for private education amid the “collapsing public education.”

        My contention is that competition should be emphasized when opportunities for competition will be guaranteed for people from all walks of life. The euquality in opportunies should not be construed as emotionally or politically charged bashing conglomerates, and should pull from plight people who have never stood near the starting point and get them to be on the starting line and encourage them to design their futures “with competition”.

      • Ruaraidh

        In Europe it’s not so much that the workers rights are making them uncompetitive per se. Rather that the usual path of currency devaluation isn’t available for the Eurozone nations tied to Germany, which are in turn acting as a drag on many of the other economies of the region. In fact the cost of improved working conditions in Europe are generally offset by highly trained workers and increased mechanisation.

  • 미대협

    Honestly, I think one of the largest reasons Korea suffers from this is that some certain businesses like Samsung, Hyundai, LG, etc. are written into their constitution as the “Chaebol” which drove Korea’s growth into a “modern” country, but by now are LARGELY abusive because of their monopolistic controls over production. http://en.wikipedia.org/wiki/Chaebol lists at the bottom the “family groups” of products, etc. and it is pretty ridiculous to see exactly HOW much one single company controls…

  • k

    I know on a personal level how hard it is for small business, my husband’s family own a beer restaurant in Yeongdeoungpo and it does pretty well, especially in the warmer months, but there are ALWAYS competitors popping up. They also rent out real estate, which helps a lot but it’s very tough for them too. The competition level in Korea is horrible, just horrible and it effects everyone from children to elders. There is no “supportive work environment”, it’s pure competition against your peers always for your job or a slightly better position. You’re judged constantly from appearance to behavior and a tiny little mistake or show of humanness can be your ruin……I knew a Korean woman, who worked for Samsung, worked 6-7 days a week, 12+ hrs a day, always paranoid about losing her job, once they demanded she stay until 6 am (she’d been there from 7 am the previous day) she stayed over night, slept at the office, went home at 6, and got back to work at 7:30 am, 30 mins past when her day normally starts, they threatened to fire her for being 30 mins late (even though she had JUST left at 6 am)….her hair started falling out, she was a mess…….I saw the fierce competition in my teaching aides too, they worked 45 hr weeks, were only paid and treated as part timers, the boss demanded they stay from 9 am till 7-9 pm every day, but offered no sick days, no vacation, and paid them only as part time……which is why we had new teaching aides every month. Total mess. The work environment is one of the biggest reasons I left Korea, I couldn’t stand how people were treated and I really didn’t want my husband to be “one of those korean guys” who work themselves to death, are absolutely miserable, drink excessively, are forced to drink by their bosses (which in my opinion is one of the reasons Korean men cheat so much on their wives), and anyway hoot, the work environment in the US is much better, not perfect, but no where near as miserable as Korea’s. I think if they improved work conditions in KOrea, the suicide rate would go down too.

    • 참을 수 없는 존재의 가벼움

      In your posting, I found some paradoxically interesting points. After being struck by the 1997 financial crisis, the US-led IMF forced Korea to further open up its market, make its labor market more flexible, and believen in free competition as a cure-all for all economic problems.

      As a result, Without preparing itsself for possible adverse effects from enhanced liberalization, Korea has fallen into ever-widening gap beween rich and poor, and push its people into a constant fear of being abandoned outside the mainstream in society. Theses are illuminated by your remarks on what happened around you while you were in Korea.

      For me, the interesting thing is that some exhausted, weary people decided to leave the nation for countries with better living conditions, like the United States, the very nation which suggested what is seen today’s destabilizing factor on Korea as a solution for the nation’s only way out of the financial turmoil.

      In short, many people move in droves to the United States when they hate to live in what the United States argued will be better place if their economic prescription is carried out. What a paradox!!

      • RealKorean

        South Korean government needs to support the small businesses or SMEs rather than the big corporations. Saenuri party needs to be out of our government!

        • 참을 수 없는 존재의 가벼움

          I also espouse the argument that the national economy will be more strong, and healthy when it consists of numerous sound small-and medium-sized enterprises (SMEs) than when big firms specializing in few fields dominate,

  • Chucky3176

    Meanwhile, the high paying jobs that require high skilled manual blue collar work go begging, so much so that S.Korea has to import all these foreign workers whom some of them are now starting to make more than the average made by native Koreans. The native Koreans are looking for just one thing: office jobs that don’t require hard labor. They’re all getting educated, competing for the few same jobs.

  • Chucky3176

    Half the working population in Korea are not even full time workers. They are what are considered temporary workers who get no benefits and lower pay. There are more temporary workers than full time workers in Korea. Before you blame the Korean corporations for exploiting the workers, consider these structural failures due to inflexibility of labor:

    1) Unless there are blatant causes, you cannot easily lay off and hire full time workers as they are needed. There are laws against this.

    2) Full time worker’s social welfare burdens are the responsibility of the companies. Any time workers quit or let go, huge lump sum severance payments must be paid out, which makes downsizing of companies during bad times, almost impossible.

    If you’re in charge of business, why would you hire someone full time, when that would mean you probably won’t be able to get rid of him when you don’t need him? The answer is hire him as a temporary, then you don’t have to pay him what he’s worth, you don’t have to give him bonuses, benefits, what have you, and you can get rid of him when you don’t need him.

    The result is predictable. More and more temporary workers making less and less, and fearing for their job status. Then the domestic economy goes to shit because people can’t afford to spend what little they earn.

    What Korea needs is a complete labor market freedom which the militant labor unions oppose. Korea’s labor is rated somewhere around 120th place in the world when it comes to labor flexibility and labor relations with management.

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