South Korea as a Semi-Peripheral Workfare State

By Su-Dol Kang

 

 

 

I. Introduction

Recent discussions about the ‘welfare state’ in South Korea (hereafter Korea) have been focused mainly on whether or not Korea can be classified as a welfare society, and, if so, on the nature of it. Many researchers tried to make it clear whether Korea fits in one of the Esping-Andersen’s typology of welfare regimes in industrialized countries. Others were engaged in finding out some particularities of ‘East Asian Welfare regimes.’ This article, however, assumes that the Esping-Andersen’s typology or the stance to emphasize the particularities of ‘East Asian Welfare regimes’ are not able to adequately explain the reality of Korean society from the perspective of working people. To overcome the limitations of the preceding theories, we need to take a broader analytical perspective. That is, instead of a static, institutional and core-country-focused approach, we should have a dynamic, historically-focused, and global perspective to fully explain the welfare regime in Korea.

Three interrelated questions generally need to be examined in considering the Korean welfare state: First, can the Korean case be regarded as ‘welfare capitalism’ in which decommodification, social mobility, and the public sector play a significant role? Second, why and how could certain welfare programs be constructed in Korea, especially in the eras of economic crisis and neoliberal politics, while the welfare states in the more developed countries of Europe have gradually been eroded by the very same socio-political system? Lastly, when did the particularities of the Korean welfare system emerge and how can they be explained properly?

This paper proposes a concept of the semi-peripheral workfare state in order to define the nature of Korean welfare society. The workfare state is a form of social governing or crisis management - the crisis caused by capitalistic antagonism.Heide, H.(2013) “Crisis-Resistance-Defeat? In search of a way out of this fatal work society,” A contribution to the ‘Marx2013’ conference in Stockholm, October, 2013.

 

II. Review of Relevant Theories

1. The Meaning of Esping-Andersen's Typology within the Present Article

It is hard to deny that, in academic discussions on the issue of the welfare system, there has been an over-reliance on Esping‐Andersen’s The three worlds of welfare capitalism typology.Esping‐Andersen G. The three worlds of welfare capitalism. London: Polity, 1990. Although Esping‐Andersen has been subjected to extensive criticism, and a number of competing welfare state typologies have been developed within the comparative social policy literatureCastles F, Mitchell D. “Worlds of welfare and families of nations,” In: Castles F, ed. Families of nations: patterns of public policy in western democracies. Aldershot: Dartmouth 1993, 93–128; Ferrera M. “The southern model of welfare in social Europe,” Journal of European Social Policy, 1996, 617–37; Jochen Clasen, and Nico A Siegel, Investigating Welfare State Change: The ‘dependent Variable Problem’ in Comparative Analysis (Edward Elgar Publishing, 2007)., it seems that The three worlds of welfare capitalism continues to maintain a stable position as a theoretical background in discussing contemporary welfare issues around the world.

As is already widely known, Esping‐Andersen (1990) proposed, using 1980 data, a typology of 18 OECD welfare states based upon three principles: decommodification (the extent to which an individual’s welfare is not reliant upon the market, particularly in terms of pensions, unemployment benefits, and health insurance), social stratification (the role of welfare states in promoting social mobilities), and the private–public mix (the relative roles of the state, the family, the voluntary sector and the market in welfare provision). The operational definition of these principles, largely using decommodification indexes, leads to the classification of welfare states into three ideal regime types: Liberal, Conservative-Corporatist, and Social Democratic.

In the Liberal regime countries, such as the US, state provision of welfare is minimal, benefits are modest and often involve strict entitlement criteria, and recipients are usually means‐tested and stigmatized. The Conservative regime, such as in Germany or Italy, on the contrary, is distinguished by its status differentiating welfare programs in which benefits are often earnings‐related, administered through the employer, and geared towards maintaining existing social patterns. The role of the family is also emphasized and the redistributive impact is minimal. Lastly, the Social Democratic regime, mainly in Northern Europe, is characterized by universal and comparatively generous benefits, a commitment to full employment and income protection, and a strongly interventionist state which is used to promote equality through a redistributive social security system.

This seminal typology, however, has been exposed to various debates and criticism: on the one hand, an extension in the range of countries included in the analysis was neededAspalter C. “The East Asian welfare model,” International Journal of Social Welfare, 2006, 15, 290–301. and, on the other hand, factors such as gender, family, culture, interaction of class and gender, politics or the role of public services to manage social risks needed to be (better) reflected in comparative analyses.Castles & Mitchell (1993) Op. cit.; Ferrera (1996) Op. cit.; Navarro V, Shi L. “The political context of social inequalities and health,” International Journal of Health Service, 2001, 311–21. For instance, Italy, like Spain, Portugal, and Greece, could be re-classified as a fourth ‘Southern’ world of welfare rather than as a Conservative one. Also Korea, along with Japan, and Taiwan, according to the same logic of criticism, ought to be classified as an “Asian welfare state” model.Aspalter (2006) Op. cit.; Kwon, S. & Holliday, I. (2007). “The Korean welfare state: a paradox of expansion in an era of globalisation and economic crisis,” International Journal of Social Welfare, 16(3), 242-248. Consequently, Esping-AndersenEsping-Andersen, G. Social foundations of postindustrial economies: Oxford University Press, 1999. himself revised his typology so as to emphasize the familistic welfare regimes in Asian countries. Even Sweden’s welfare system has been, in the meantime, considerably liberalized: “Sweden around year 2000 was very different from Sweden around 1980.”Bergh, A. “Towards a New Swedish Model?” In: Bengtsson, T. ed. Population Ageing – A Threat to the Welfare State? The Case of Sweden. Berlin:Springer, 2010, 109-119.

Independent of every kind of criticism or debate around Esping-Andersen’s typology, it is still relevant, from the perspective of working people’s lives, to emphasize the aspects of decommodification, social mobility, and public sector. The quintessence of the welfare debate, however, is the wellbeing of the people in their whole life process. In this regard, it is most critical to decommodify labor power for supporting people’s life.

However, the criticism of the Esping-Andersen’s typology in itself is not the focus of this paper. It rather focuses on shedding light on the nature of the construction of the welfare regime, especially in contemporary Korea which is still reeling from the ‘Asian financial crisis’ of 1997-99. The Korean case dealt with in this paper is neither able to fit into the categories of the typology in the literature up to present nor sufficiently explain the latter’s terminologies.

 

2. What Are the Particularities of the ‘East Asian Welfare Regimes’?

The various other models for examining the particularities of the ‘East Asian Welfare regimes’ do not fully explain the idiosyncratic nature of the Korean welfare system. For example, it seems superficial that theories of a Confucian welfare stateChan, R. 2001 ‘The Welfare System in Southeast Asia: Development and Challenges’, Southeast Asia Research Center, Working Papers Series No.13, Hong Kong: City Univ of Hong Kong.; Jones, C. “The Pacific challenge: Confucian welfare states,” in C. Jones (ed.), New Perspectives on the Welfare State in Europe, London: Routledge, 198-217. One could meaningfully deal with some common factors and differences in welfare system among Asian countries but this paper focuses mainly on the nature of Korean welfare system in a historical action perspective (cf. Heide 2013). highlight the ‘welfare mix’ with an over-proportion of patriarchal, familial, or company welfare and under-development of state welfare. Although it is partially pertinent, it tends to easily give a cultural husk to the welfare system without scrutinizing the political-economic contexts of the system’s development. If Confucianism has any meaning to the welfare regime in Korea, it can be said that the vertical nature of social relations in Confucianism contributed to the formation of a special social psychology: ‘identification with the strongest’.See Fn. 1. The same is true with those theories focusing on late-onset welfare state development in Korea.Goodman, R., White, G., & Kwon, H.-j. (1998). The East Asian welfare model: Welfare orientalism and the state: Psychology Press; Kim J. W. (2005). “Dynamics of the welfare mix in the Republic of Korea: an expenditure study between 1990 and 2001,” International Social Security Review, 58(4), 3-26. What is significant to our discussion is not the timing itself, but the reason for the delay in the development of a welfare regime.

Even the theories giving attention to the ‘productivism’ aspect of the welfare state in KoreaHolliday, I. (2000). Productivist welfare capitalism: Social policy in East Asia. Political studies, 48(4), 706-723; Lee, Sophia Seung-yoon, “Development of the ‘productivist’ welfare regimes in Japan and Korea, in Higo M. & Klassen, T. ed. 2015 Retirement in Japan and South Korea: The Past, the Present and the Future of Mandatary Retirement, New York, Routledge, 30-47., though approaching the truth, do not explain its productivist roots. They do not go further beyond highlighting social or welfare policies subordinated to economic policies in Korea. Their explanations mainly pay attention to the institutional level and, by doing so, ignore the subjective aspects of accounting for the development of the welfare regime: the collective action of the social actors such as the state, companies, and the working people, and their power relations.

For example, the relatively low level of public social expenditure by the Korean government in comparison to welfare states such as Germany or Sweden is attributable both to the weak material base of the welfare regime and to the un(der)development of powerful working class organizations to force through such a development. The same can be applied to the fact that social and fiscal policies in Korea have made only a small impact on income distribution, which can easily be confirmed through the standard analysis of cross-sectional redistribution.Kwon, H.-J. (1997). Beyond European welfare regimes: comparative perspectives on East Asian welfare systems. Journal of social policy, 26(04), 467-484. cf. Some might argue Korea as a OECD member since 1996 is no more a semi-peripheral country. However, Korea still does not belong to the core of the world system in the aspects of political, economical, social, and cultural position, with the ideological and military influence of U.S. still remaining powerful.

Lastly, many theorists of the ‘East Asian Welfare Model’ tend to emphasize the role of non-state sectors in the development of welfare regimes: mainly the family and large companies.Goodman, R., & Peng, I. (1996). The East Asian welfare states: Peripatetic learning, adaptive change, and nation-building. Welfare states in transition: National adaptations in global economies, 192-224.; Jones 1993 Op. cit.; Kim 2005 Op. cit. Here also in the “welfare mix” theory is ignored the historical dimension in welfare regime development. In Korea, for example, the absence or un(der)development of the welfare system throughout the rapid and systematic development of the economy almost forced people to maintain familialistic or neighborhood welfare relations as a basis for survival. Rather, it would be proper to say state-led economic development in Asia has depended upon grassroots welfare relations. This, by anyone’s account, cannot be accurately called a welfare state model. In this sense, classifying this reality as a kind of welfare state is wholly misleading.

 

III. A semi-Peripheral Workfare State in South Korea

An alternative concept has to be proposed to account for the reality of social life in spite of some recent, and spectacular, economic development in Korea: a semi-peripheral workfare state.

This can be explained as follows: First, before capitalistic development, a kind of autonomous, impersonal welfare relationship had been in place in Korea. Second, these grass roots relationships have been systematically destroyed through the development of capital, both on the national and global level. This coincides with the fact that post-WWII Korea has successfully climbed up the global ladder of “development” via a rapid economic growth under the pro-capitalist state: from a peripheral to a semi-peripheral position. Third, with the rapid growth of the country’s labor movement, searching for both compensation for economic performance and humane and democratic rights, the developmental state of Korea has been confronted with a considerable amount of pressure, both domestically and from abroad. Fourth, this pressure found release in the neo-liberal restructuring of the state: from a developmental to a workfare model. This workfare model means work is welfare. The workfare state is characterized by an addictive performance-orientation on the one side and by minimal welfare for the marginalized on the other. It holds not only for Korea, but for almost all of the workfare systems. In this context I come to the conclusion that the workfare state is an expensive tool for governing labor, while the most expensive remains doubtlessly the universal welfare system.

 

1. Before the 1997-99 Crisis: Communitarian Welfare Relationships

Before the background of the un(der)development of the welfare state in Korea, grassroots welfare relationships such as family, relatives, friends, and neighborhood or community played a significant role in supporting people’s subsistence. For instance, people in every village in the late Chosun dynasty worked and played together in a group called dure on rice fields of their own or commons. The dure consisted of almost all the ordinary adult men in the village at the age from 16 to 55.Shin, Y.H. “Dure Community and Farmer Culture,” Sociological Research Association ed. Modern Capitalism and Theory of Community (in Korean), Seoul: Hangilsa, 1987; Joo, G.H. Dure in Korea 1. 2. (in Korean) Seoul: Jipmoondang, 1997. This dure was not only an autonomous form of work organization in agricultural areas, it functioned also as an autonomous welfare institution for the people in each community.

Korean people lived in a reciprocal way, as was common for communities of the pre-industrial era. When a baby was born, family and neighbors alike celebrated side by side. If somebody was sick, not only family members but also the neighborhood cared for him/her. When young women and men married, the whole community celebrated together, day and night. In this culture, work and play were indivisible. And, when an old person died, the entire village mourned together and cooperated with each other during the burial ceremony. This can be called communitarian culture of welfare among people, quite different from the welfare regime organized from above by the state.Lee, C.J. Festival (in Korean), Seoul: Yolimwon, 1996.

 

2. The Destruction of Communitarian Welfare Relationships through Rapid Economic Development

The failure of the Chosun dynasty in making a democratic social change as well as in coping with the door-opening pressure by foreign powers provided Japanese or Western power with the opportunity to plunder Korea, like other Asian countries. In 1905, after the Russian-Japanese war, Japan robbed the Chosun dynasty of diplomatic rights through the Protectorate Treaty between Korea and Japan. And in 1910 Japan annexed and occupied Korea until the end of World War II.

During the period of Japanese colonialism not only the collective welfare relationships among local peoples but also the autonomous organizations of farmers or workers were systematically destroyed. The Maintenance of the Public Order Act [chian yujibup] of 1925 was a representative example: the number of people against either Cheonhwang, the Japanese Majesty, or private property, and thereby imprisoned or executed, amounted to 75,000.http://blog.naver.com/ubsaerom33/30004977047 (in Korean). Besides, the war recruitment in the last stage of Japanese colonialism dissolved the base of dure considerably.Joo, G.H. Dure in Korea 1, Seoul: Jipmundang, 1997.

The U.S. military which occupied South Korea right after WWII, justified their occupation as an effort to demilitarize Japan, regarding Korea only as a bridgehead for American expansion and protection against the communism of the Soviet Union. In this context they brutally repressed every kind of social movement against the government. During the Korean War (1950-1953) most left-wing activists had been either disappeared or killed.Cumings, B. (1981). The Origins of the Korean War. Volume 1. Liberation and the Emergence of Separate Regimes, 1945-1947: Princeton University Press.; Han, H.G. 2003, South Korean History 1 (in Korean), Seoul: Hankyoreh, 2003; Kim, D.C. 2000, War and Society (in Korean), Seoul: Dolbegae. Almost three decades of dissident eradication left the whole society with deep a collective trauma, the ‘red-complex’.Holger Heide, ‘The Creation of Individual and Collective Strategies of Survival as a Pre-Condition for Capitalist Development: The South Korean Example’, in Proceedings of the Fifth International Conference on Korean Studies (1997); ―, South Korea: The Crisis-Spurred Transition to a New Mode of Accumulation (Universität Bremen, Fachbereich Wirtschaftswissenschaft, Institut für Sozialökonomische Handlungsforschung, 1998); —, ‘Schumpeterian Dynamics in Crisis? The Case of Korea’, Schumpeter and the Dynamics of Asian Development, 7 (2000), 87.

It became clear that capitalistic development promotes a drastic destruction of many living social relations. It creates only material conditions as well as human attitudes for the valorization of capital. For capital, it is necessary both to educate labor power and to suppress it. Exactly in this respect lies the antagonism of capital.Heide (2013) Op. cit. The same holds for the Korean history.

After Park Chung Hee’s coup d’Etat in May 1961, according to the ‘Fraser Report’ of October 1978The original title of this Fraser Report (1978) is ‘Investigation of Korean-American Relations. Report of the subcommittee on the international organizations of the committee of the international relations’, U.S. House of Representatives, Washington: U.S. Government Printing Office, October 1978 (hereafter Fraser Report). http://babel.hathitrust.org/cgi/pt?id=pur1.32754077064610;view=1up;seq=23., the U.S. sought to ‘educate’ Park, with stick and carrot policies, in the fundamentals of governing. For instance, when Park was reluctant to effect tax reforms recommended by the Agency for International Development (AID), they refused to support Korea with a grant for nine months. In this way, during the early post-coup period, the U.S. was able to convinc the Korean government to initiate economic reforms in a certain way. And in May 1964 the United States Operations Mission (USOM) urged the Park government to make an exchange rate reform to devalue the Korean currency. This was incorporated into the ‘stabilization program’ that included increase of savings, raise in export, reform of banks and financial structure, and even encouragement of the ‘self-confidence’ of Korea for economic growth.

Today, Korea has earned an international reputation as an exporter of high-tech goods such as automobiles, microchips, and electronic equipment. The per capita income in Korea has reached about 87% of the OECD average in 2013 (close to the levels in Spain and Italy).

Decades of economic development in Korea, which successfully enhanced the position of Korea within the world system from the periphery to the semi-periphery, was nothing but a process of destroying existing autonomous welfare relationships: on the one hand almost all community relationships from the agricultural countryside have been gradually dismantled and on the other hand peoples’ welfare has gradually become dependent on the public or their employers’ policies. This made younger people compete harshly with one another for employment either in public sector or in chaebols where comprehensive corporate welfare programs were available, such as scholarship for children or credits for housing purchases.

However, the so-called export-oriented industrialization was not only the idea of Park and his party, who, together, had the capability to cultivate cozy relations with chaebols known as ‘State-Chaebol-Complex’.See Fn. 21. As implicated, the successful economic growth, the ‘miracle of Han river,’ was also a result of compromise between U.S. as a core country and Korea as a peripheral player. However, this compromise occurred on an asymmetrical ground. Korea was mainly coached by the U.S. which regarded Korea as a sub-partner in operating East Asia: “The rapid transformation of the South Korean economy is one of the world’s greatest examples of economic development. (…) the achievement is a tribute to the industriousness of the Korean people, effective implementation of planning by the Government, and cooperation between the United States and the Republic of Korea.”The Fraser Report, p.7. Fair as it looks, it was a result of the Korean people’s submission to an economic development plan from above, that is, under the leadership of Park who in turn was led by the U.S.

 

3. Revitalization of the Labor Movement since the 1980s

Not only international capital but also Korean chaebols have searched for more liberalization and deregulation of capital since the 1980s. However, neoliberal globalization was repeatedly delayed by the Korean people’s demands for democratization. In June 1987, for instance, the people’s movement ended the three-decade military dictatorship of Park and Chun Doo Hwan. Beginning in the summer of 1987, the Korean labor movement began gradually strengthening ‘democratic’ labor unions in order to improve working conditions. This process is commonly referred to as the Great Struggle of the Workers of 1987. Everyday workers attended street demonstrations for democratization both in Korean factories and in Korean politics. The number of unions increased from 2,551 in 1985 to 7,698 in 1990.Korea Labor Institute, KLI Labor Statistics 2015, Sejong: KLI, 2015, p.140.

It was actually a revitalization of the progressive labor movements led by Jeonpyeong [the National Council of Korean Labor Unions] which had been systematically suppressed and destroyed, both by the Japanese or U.S. imperialism and by Korean governments. Its roots date back to Chosun Nonong Chong Dongmaeng [the Korean Workers-Peasants League] in 1924.Cumings, B. in [20] p.77; “Chonpyong[=Jeonpyeong] was the only labor organization in the south until mid-1946 and remained the strongest union until after the autumn upsprings [in September 1946].” (p.198). The Jeonpyeong movement led grass-root struggles for liberation from both imperialism and capitalism. In fact, “most impressive economic records of modern capitalism” in KoreaOECD, “Labor market reform and social safety net policies in Korea,” Policy Brief, Paris: OECD, 2000. were created on the basis of repressed discontent among the working people. However, they could not be left untouched forever. Once broken by the movement for democratization, the repressed fear and anger erupted explosively and produced thousands of new pro-democratic unions. Owing to struggles in solidarity across the borders of companies, regions, and sectors, the power relationship between capital and labor changed, partially in favor of labor. Finally, in spite of continuous intimidations and oppressions by the state, the Korean Confederation of Trade Unions (KCTU), as a national center of democratic and independent unions, was grounded in 1995.

After these Great Struggles, Korean governments faced two challenges: to integrate the democratic labor movement into the system and to globalize Korean capital. Large firms or chaebols, thanks to the economic boom at that time, were among the first to provide their workers with generous welfare benefits like free meals, fitness centers, scholarships for workers’ children, and housing subsidies. However, these welfare packages were not developed as an equivalent substitute for a welfare state, but, rather, as a concession to the request of workers for factory democracy. Therefore, they are not just “welfare mix,” but a welfare shill in order to recover the recently diminished power of the chaebols by further integrating the struggling workers into their companies’ cultures. However, many from the labor movement refused these integration attempts.

This change became, over time, intolerable to the firms. Not only the high cost for labor motivation, but also the loss of control caused great anxiety on the side of capital. The Korean government and companies grew fearful of the growing power of the domestic labor movement.

They consequently developed two-sided strategies: On the one side they pursued a global strategy either by transferring plants abroad or by importing faithful and cheap labor from abroad. Daewoo, for example, began to invest in Vietnam, Uzbeckistan, India, and Poland during the 1990s. Hyundai-Kia Motors also decided to produce cars in the U.S. (2006), Slovakia (2004), China (2002), India (1998), and Turkey (1997). Samsung, too, has many factories abroad, such as in China, Mexico, and Vietnam.http://m.post.naver.com/viewer/postView.nhn?volumeNo=258182&memberNo=3901450&vType=VERTICAL; http://www.samsung.co.kr/about/affiliate/sec.html; http://www.sec.co.kr/index.jsp (in Korean). On the other side they devised the well-known ‘divide-and-rule strategy’ against struggling workers and labor unions. For instance, the number of imprisoned workers was 1,973 under Roh Tae Woo (1988-92) and 632 under the Kim Young Sam (1993-97) administration. Unfortunately, these circumstances did not change under liberal democratic governments: 892 and 1,052 workers were incarcerated under Kim Dae Jung (1998-2002) and Roh Moo Hyun (2003-2007), respectively.http://cafe.daum.net/supportingworkers (in Korean). The ‘hard line’ unions and their members were systematically excluded and irregular workers were employed in their place. So rose up the ratio of irregular workers in Korea from about 30% in 1985 to 46% in 1990 and again to 57% in 2002.Statistics Korea, http://kosis.kr/statisticsList/statisticsList_01List.jsp?vwcd=MT_ZTITLE&parentId=B. This brought about fierce competition among workers, even among unionists, for a better and securer job, leading to a remarkable weakening of labor solidarity.

However, this wasn’t necessarily an automatic process. Workers were frequently well-organized and struggled against the anti-labor strategies of the state and of the chaebols between 1987 and 1997: general strike and sit-in strikes were the preferred tools of resistance. Especially, at the end of 1996, a nation-wide wave of general strikes occurred in response to a retrogressive revision of the Labor Law.Jang, S.H. 2004. “Continuing Suicide among Laborers in Korea,” Labor History, 45(3): 271-297; Yoon, B.J. 2005. “Labor Militancy in South Korea,” Asian Economic Journal, 19(2): 205-230. As a result, capital could not fully achieve its objective to regain their control power over laborers like they had before 1987. The discontents of the people with the government and the ruling political class were expressed in the 1997 presidential election. People supported the democratic change of the government with the newly elected president Kim Dae Jung, the life-long dissident for liberal democracy under Park and Cheon military dictatorship.

Exactly at this time, the International Monetary Fund (IMF) could intervene into the power relations between capital and labor in Korea, under the pretext of bailout programs from the foreign exchange crisis. The Asian foreign exchange crisis began in Thailand in July 1997 and then transformed into a financial avalanche, sweeping also Korean society. The IMF’s structural adjustment programs, in exchange for bail-out credits (35 billion American dollars), requested the Korean government to reform relevant structures in order to improve conditions for foreign capital investment: liberalization, deregulation, privatization, and flexibility.Kim, D. 1999. “IMF Bailout and Financial and Corporate Restructuring in the Republic of Korea,” The Developing Economies, 37(4): 460-513.

As long as workers remained strong, however, the governments could not fully achieve their objectives. The general strike during the closing months of 1996 in response to the unilateral efforts to change the Labor Law in favor of capital was just one example. From 1987 up to 1998 there were numerous struggles between the chaebols and workers, which made the state impatient.

In the meantime the power relationship between the state and the chaebols was changing: from a State-Chaebol-Complex (SCC) to a Chaebol-State-Complex (CSC). While the governments were hesitating in coping with the activated social movements, the chaebols exerted substantial power. For example, the X-File scandal made public through a journalist in July 2005 was about the Samsung-chaebol that regularly bribed politicians and prosecutors to wield power on significant political-economic issues such as the upcoming presidential election.Kim, Y.C. Thinking of Samsung (in Korean), Seoul: Sahoepyungron, 2010. Moreover, even the Supreme Court declared two journalists as guilty for merely exposing the X-File scandal; not because of the contents of the scandal but, rather, because of their “illegal” sources of information on the scandal.Korea Times, 17. March 2010.

 

4. Neoliberalism in the Post-Crisis Era and the Semi-Periphery Workfare State

Exactly in the wake of foreign exchange crisis in 1997 intervened the IMF and world capital in the socio-political processes of Korea. In the name of ‘bail-out’ programs world capitalism forced Korea to open its doors and realize the neoliberal reformsHeo, I. 2013. “South Korea’s Corporate Restructurings After the 1997 and 2008 Economic Crises: Different Patterns and Lessons for Policy,” Asian Politics and Policy, 5(3):441-459; Kim, D. 1999. Op cit.:

  • the limitations on stock ownership by foreign capital disappeared,
  • the chaebols and banks were restructured in order to reduce over investment,
  • the liberalization of Merges &Acquisitions,
  • the labor market was made highly flexible

The foreign exchange crisis was generally regarded, in a populistic way, as a ‘national humiliation.’ People identified the crisis with the day of national annexation by Japanese imperialism in 1910.

Although some people organized anti-neoliberalism strugglesMcNally, D. 1998. “Globalization on trial: Crisis and class struggle in East Asia,” Monthly Review, 50(4): 1-14; Shin, K.Y. 2010. “Gobalization and the Working Class in South Korea,” Journal of Contemporary Asia, 40(2): 211-229; Kang, S.D. 2000. “Labour relations in Korea between crisis management and living solidarity,” Inter-Asia Cultural Studies, 1(3), 393-407., most cooperated with the government in rescuing the ‘national’ economy by collecting gold and selling it at a cheaper price, among other interventions. Even the working people identified their fate with that of the nation. Fearing termination, people voluntarily worked longer and more intensively. They even gave back their paid leaves in the interest of rescuing ‘their’ companies.

In this situation, the newly elected President Kim DJ was referred to as “the IMF man in Seoul.”Cumings, B. “The Korean Crisis and the End of ‘late’ Development,” New Left Review, 231, Sep/Nov. 1998, p.60. In fact, he was acknowledged as a life-long fighter for Korean democracy since the 1970s and 1980s. So the Korean people’s expectations were high. This made him highly powerful in the realization of neoliberal reforms since his presidency.

The Kim DJ government (1998-2002) set up three main objectives for social reform: chaebol, labor, and welfare reform. However, the plan had critical shortcomings, because there was no fundamental reflection on capital-labor relations.Song, J. 2009. South Koreans in Debt Crisis: The Creation of a Neoliberal Welfare Society, Durham: Duke University Press. To make things worse, many dissidents, without hesitation, participated in government and were no longer openly critical of state power. They only emphasized a parallel development of ‘democracy and market economy.’ Consequently, “it was rare that dissident groups problematized their own liberalism.”Ibid.

The Kim DJ government pursued liberal democracy to rationalize old structures of Korean economy, which had an offensive nature against working people. The administration had no insight into the capital, instead, it tried, owing to the pressure of IMF or global capital, to ‘sell’ Korea to global capital with the expectation of creating jobs, improving the governance structure of chaebols, and a long-term stabilization of banks. Consequently, the government failed in societal reforms and in so doing aggravated the quality of working people’s life. The same is largely applicable to the following Roh Moo Hyun government (2003~2007).

For example, a fundamental chaebol reform should have included a breakdown of SCC or CSC as in Japan after WWII or a radical democratization of chaebol ownership and management. Likewise a fundamental labor reform could have practiced a full-fledged guarantee of labor rights, factory democracy, and a radical shortening of working hours. And a genuine welfare reform would have secured all the people’s subsistence regardless of their capability or readiness for wage labor. However, not only the power relationship but also the visions of the labor movement were not ripe at that time.

These circumstances form the background for the development of the semi-peripheral workfare state in South Korea: On the ground that Korea has climbed up the world system ladder from periphery to semi-periphery, the state and chaebols now could develop some limited welfare programs for supporting marginalized people to prevent possible riots and to push them into labor market.

As a matter of fact, the unemployment rate rose from 2.6% in 1997 to 7% in 1998 and to 8.5% in early 1999.Lee (2015) Op. cit.; OECD (2000) Op. cit.; Dong-ah Weekly, February 1, 2016. In reality, however, the substantial unemployment rate amounted to over 20%. And the number of irregular workers increased from 40% in 1993 to 51% in 1999 and to 56% in 2002.Kim, Y.S. 2003. “Size and Situation of Non-regular Workers” Nodong Sahoe, 72, 167-184. Even the IMF has requested that Korea create minimal ‘social safety nets’ in order to prevent a potential social crisis owing to neoliberal restructuring, especially the labor market reforms.OECD (2000) Op. cit.

For instance, the public social expenditure per GDP has increased from three percent in 1990 to six in 1998 and to around 10% in 2010 and remains more-or-less the same up to the present.Lee (2015) Op. cit. It is a striking leap to consider that it was recorded as only 0.83% in 1970. However, in 2014 it amounts to just 10.4%, which is the lowest among the OECD countries.The Yonhap News (in Korean), September 2, 2015. Moreover, very few people feel as though their lives are socially secured.

Unlike Germany and Sweden, South Korea does not have a sufficient material base for comprehensive welfare provisions. Therefore, the screening process for eligibility through a means-test is quite strict and to some extent even humiliating. The National Basic Livelihood Protection Act (NBLPA) took effect in September 1999 and provides a good example. Different from the previous social assistance program, which covered only the poor who were unable to work, the NBLPA significantly expanded its coverage. That is, even those who could work but have low income found themselves covered by this new welfare provisions policy. However, those who do not work, despite their capability, are eligible for less money or can even lose their eligibility via the scrutinization brought about by the means-test. This idea of punitive workfare was developed in order to avoid so-called ‘welfare misuse’ and, at the same time, to foster motivation for labor. All of this reinforced the work-orientation of the people’s mindset, up to the work addiction whose index in South Korea is the highest in the world.Business Insider, January 10, 2014; CNN, November 27, 2013; Kang, S.D. Escaping from Work Addiction (in Korean), Seoul: Mayday, 2007.

However, workfare-as-welfare based on a means-test features a contradiction: Many poor people are typically disqualified from basic livelihood assistance benefits through the screening process because of the possession of assets or family members capable of supporting them.The Hankyoreh (in Korean), November 14, 2014. Consequently, the poor get poorer.

A survey by the National Human Rights Commission found that, after subtracting debt, the ineligible poor have only 4,400 dollars for average net assets and this is even less than the benefit recipients’ 5,000 dollars.Ibid. For government or chaebols, providing people just with work or a job seemed the most desirable welfare program. They called it a ‘productive welfare,’ implying that universal welfare regardless of job ownership would be counter-productive for the ‘national’ economy.

Another social insurance the Kim DJ government strengthened was the extended unemployment insurance to companies with five and more regular employees in March 1998, and to all firms in October 1998. Moreover, in December 2002 the government began to apply the unemployment insurance even to day workers in the construction sector. And in November 2001 the Maternity Protection Act became effective with the support of the unemployment insurance. However, all these measures had a restrictive effect: “A large proportion of workers are still excluded from social protection.” Over 80 percent of irregular workers including contingent ones are not eligible for social insurances.Shin, K.Y. 2010. Op. cit. p.222-3.

On the other hand, the poverty and inequality in South Korea soaredShin, K.Y. 2011. “Globalization and Social Inequality in South Korea,” in J. Song (ed.), New millennium South Korea: Neoliberal capitalism and transnational movements, London: Routledge, 11-28. despite ‘productive welfare.’ The ‘productive welfare’ system, therefore, had little influence on wealth redistribution. The worsening of poverty and inequality was substantially related to the flexibility of the labor market: massive layoffs and precarious labor. The workfare does not function as a buffer between unemployment and inequality: “Before the 1990s the welfare state [in Europe] worked as an effective buffer between unemployment and inequality, the transformation from welfare to workfare has made social policy less egalitarian (both regarding its effect on market income and its redistributive responsiveness to increases in unemployment).”Rueda, D. (2015). The State of the Welfare State: Unemployment, Labor Market Policy, and Inequality in the Age of Workfare. Comparative Politics, 47(3), p.297.

In the wake of neoliberal restructuring in Korea – i.e. liberalization, deregulation, privatization, and flexibility – the power of the democratic unions decreased drastically. For example, after a bitter defeat in the struggle against mass layoffs at Hyundai Motors in 1998Kang 2007; Park, T.J. 2014. Korean Labor Relations at Hyundai Motors (in Korean), Seoul: Daily Labor., lots of workers began to distrust the democratic unions and strikes as a method of resistance. Instead of aspiring to change the contradictory structure such as the CSC, the ‘royal’ governance of chaebols, or the workfarism, many working people tended to search for individual solutions by participating in fierce competition on the labor market for a secure job. For example, in 2011 the labor union at Hyundai Motor fought for a collective agreement [i.e., for goyong sesup] that guarantees, though illegally, to hire their members’ children preferentially.Seoul Economic Daily, May 16, 2013.

Of course, many people and unions resisted these neoliberal changes. Nevertheless, many more people cooperated with the state to rescue the economy of the ‘fatherland’ in the name of the ‘national interest’ [gukik].Heo 2013; Kang 2000; Shin 2010. In addition to the government, Korea’s conservative media criticized workers’ struggles against mass layoffs more harshly than ever before for jeopardizing the national interest: “The interest of the minority should be sacrificed for the benefit of the majority.”Korea Herald, January 13, 1998. Now, many people started to make individual efforts to survive: “As long as I am still at my job, I must work as much as possible to earn money.”Park 2014, p.103-4.

Since the crisis of Fordism the neoliberal globalization of capital in Western countries, intended gradual retrenchment of welfare through austerity policies and restriction of labor rights as well. In Korea, however, there was little welfare to diminish. Instead, creating another kind of welfare was necessary for the stabilization of society which stood under the pressure of restructuring from a state-led to a market-led country. This stimulated a chance in power within the ruling class: from State-Chaebol-Complex (SCC) to Chaebol-State-Complex (CSC).Heide (1997, 1998, 2000). Op. cit.

To make matters worse, in January 1998, for the first time, the Kim DJ government institutionalized the Tripartite Commission, where the KCTU participated but was not successful in facilitating social dialogue.Han, C., Jan J., Kim, S. 2010. “Social dialogue and industrial relations in South Korea: Has the tripartite commission been successful?” Asia Pacific Viewpoint, 51(3): 288-303. From the beginning, the process was bent in the favor of the state and the chaebols in the name of overcoming the ‘IMF crisis. Additionally, popular sympathy towards the ideology of the ‘national interest’ was widespread, although the crisis was not the crisis of society itself nor the people, but of capital’s mode of accumulation. Even the stance of the KCTU remained unclear in this regard, having finally agreed to the legalization of massive layoffs and workers dispatch in February 1998. This complicity of KCTU with capital accelerated its own splitting, rendering it less and less powerful.

In this way, the semi-periphery workfare state has been consolidating itself in Korea since the IMF crisis. In other words, it was needed for the neo-liberalization of the SCC in Korea which was an urgent request not only of the Korean chaebols to regain the lost power but also of world capital for greater profits on a global scale. In other words, it served as a buffer or ventilator to prevent the hypothetical resistance of the marginalized.

 

IV. Multidimensional Dualizations in the Semi-Peripheral Workfare State – An analytical Note

Until now, the welfare state in Europe has yet to develop in Korea. In contrast, however, the semi-peripheral workfare state has. Two observations are required for understanding the origins of this phenomenon.

Firstly, the material base for Korea’s welfare system remained relatively weak. Having been exploired by Japanese colonialism (1910-1945), controlled by the American military (1945-1948), and destroyed by the Korean War (1950-1953), capital productivity in Korea remained low in comparison to the advanced countries in USA or Europe throughout much of the twentieth century.Cumings 1998; Heide 2000. Although Korea became a semi-periphery workfare state through decades of economic development, the material base for a universal welfare system continues to remain vulnerable. For instance, according to the Ministry of Finance, Korea’s national debt is expected to climb to 40 percent of the country’s GDP. Moreover, the country is also expected to have a budget shortfall through 2019.Blumberg Business, September 8, 2015. It is at least partially because of budget waste, especially in areas such as military defense or civil engineering and construction like the four-river-project under the Lee MB government. On the contrary, by the end of 2014, the 30 largest chaebols have accumulated up to 683 trillion won [$573 billion] as internal reserve.FKI Press Release (in Korean), September 3, 2015.

Secondly, the working class failed to develop their collective power so as to force a transformation of Korea into a welfare society. Immediately following the Great Struggle of Korean workers in the summer of 1987, union density increased up to 20 percent. However, as of 2016, it has decreased to merely 10 percent. And the rate is divided into two national centers: the relative conservative FKTU (Federation of Korean Trade Unions) and the more progressive KCTU (Korean Confederation of Trade Unions). Destroyed and oppressed by the government during the post-war periods, and also during the process of the “miracle of Han river” in the 1970s, the workers’ movement in Korea experienced severe setbacks and, consequently, largely failed to effectively mold class consciousness.Heide (1997) Op. cit.; Koo, H. 2001. Korean Workers: The Culture and Politics of Class Formation, Ithaca: Cornell Univ. Press. Workers often became angry at inhumane treatment by employers or managers, and even went on strikes in the interest of achieving better working conditions. However, many of them also believed wholeheartedly in Korea’s economic success. This is so because they deeply identified themselves with the interests of the “fatherland.” Korean culture takes great pride in cultivating a strong work ethic. This is the basic context for why workfare could seem to be welfare to some Korean people.

Here, one could ask about the results of the semi-periphery workfare state. Because this semi-periphery workfare state tries to climb up to the core, it tends to take the ‘divide and rule’ strategy to working class, retaining the level of welfare only at a minimum. As a result, the socio-economic polarization of Korea has been strengthened since the crisis in 1997/99. This polarization can be characterized by four-faceted dualizations.

First, the flexibilization of labor market in 1998 made it easier to lay off regular workers and to employ precarious ones. Therefore the rate of non-regular employment on labor market has sharply proliferated from 41.9% in 1995 to 51.7% in 1999 and to 55.8% in 2007, reaching a peak point.Kim Y.S. 2012. “Size and Situation of Non-regular Workers” Nodong Sahoe, 167, November-December. Non-regular workers here are defined as workers who work only for part-time, without tenure-guarantee, or with sub-contracts. For seven years, from 2001 to 2007, the rate of non-regular workers in Korea ranged between 55 and 57%.Kim Y.S. 2015. “Size and Situation of Non-regular Workers” Nodong Sahoe, 183, July-August. For recent periods, the ratio has gradually decreased and finally reached at 44.6% in March 2015, although the number of non-regular workers already came close to more than eight million.

Partially, aside from the increase of the total labor force, this can result from many hard struggles of non-regular workers against precarization of labor.The total workforce in Korea amounted: 10.95 million in 1990, 12.8 million in 1995, 13.00 million in 2000, 15.00 million in 2005, 16.60 million in 2010, and 18.80 million in 2015. For example, two non-regular workers, Cheon Euibong and Choi Byungsung, went on a sit-in strike on an electric transmission tower (25m high) for about 300 days (from October 2012 till August 2013) in front of the Hyundai Motors in Ulsan, demanding regularization of illegitimate subcontracted workers.Korea Times, August 8, 2013. The Hyundai Motors have used around 15,000 subcontracted workers illegally for 10 years (from 2002 till 2012). The Supreme Court decided these workers be regarded as ‘regular’ workers, as they worked continuously for more than two years for Hyundai under their direct labor control.

According to Statistics KoreaStatistics Korea (2015)., the monthly wage of non-regular workers in Korea amounts on average merely 49.1% of the regular workers’ counterparts. And these non-regular employees are much less covered by social insurances than regular ones: only 37.9% of them covered by the national pension (in case of regular workers, 82%), merely 45.2% by national health (regular workers, 84.7%), and 44% by employment insurance (regular workers, 82.4%). It remains almost the same as in 2001: 37.7%, 54.1%, and 37.7% respectively.Lee, H.G. 2001. “Protections for non-regular workers,” (in Korean) Workshop paper on the Tripartite Commission, October 2001. That means the discriminatory structure once made during the IMF economic crisis keeps on unchanged.

Even non-regular public workers like janitors at the Sejong government complex, could get no bonus, whereas regular workers (official public servants) got 400% of their salaries as bonus. The relevant law prohibits any discrimination in working conditions but it remains only on the table. Out of angry, the janitors began to strike at the Sejong complex in September 2015. After a two-week-long strike they could get a partial concession from their employer.From an interview with a janitor in Sejong City on September 15, 2015.

Second, a kind of feminization of the labor force on the one hand and a traumatization of female workers on the other hand can also be observed. In fact, around 2/3 of what might be called Korea’s “precarious workers” are women.See Fn. 67. They are eligible for less than half of the wages that male workers receive, although they perform the same amount and quality of work. Korean women, for instance, working as “regular” employees, make 68.2 for every 100 earned by their male counterparts. Among “irregular” female workers, however, only 35.9 is earned for every 100 earned by Korean men. What is worse, in some firms such as Hyundai Motors or Nonghyup, women workers were forced to resign during the IMF economic crisis because they were not considered to be the main breadwinners for their families. For instance, at Hyundai Motors in 1998, around 1/3 of the automotive manufacturing jobs were endangered. However, by the end of negotiations, the company’s union had agreed to the layoffs of 277 workers, including 144 women who had been working for the company’s internal restaurant. Regarding the change in the employment of permanent workers according to gender from July 1997 to July 1998, the ratio of female employment decreased by 19.7%, while the rate for permanent male workers was decreased by 6.4%.Statistics Korea (1998). In this way female workers stood under far more pressure than their male counterparts during the same economic hardships and were, therefore, more traumatized by the rounds of layoffs.

Third, the discrepancies between chaebols and SMB in terms of wages or fringe benefits are growing and, seemingly, irreversible. In 1997, for example, when monthly wages at companies with 500 or more employees assumed 100, the wages at smaller companies with 100 to 299 employees were 79.9 while wages at firms with 10 to 29 employees were 72.3. This discrepancy grew between 2000 and 2003: wages at companies with 100 to 299 employees were reduced to just 78.0 and 73.3 respectively while those at companies with 10 to 29 employees decreased to 68.2 and 59.4 respectively.Ministry of Labor Korea, Monthly report on labor statistics, each year. When it comes to company welfare as expressed in non-monetary provisions, SMB, which boasts 30-299 employees, was 96.1% of that in large companies with 300 and more employees. In 1997, however, this ratio fell to 64.9%, and even further to 39.9% in 2000.Ministry of Labor Korea, Report on the labor cost, each year. By contrast, Korea’s top 1,764 large manufacturing firms earned about 30% more in 2014 than they did in 2009, while their annual tax payments only increased by 0.3% during the same period.Money Times, September 7, 2015.

Fourth, the discrimination of migrant workers is not only institutionalized but also internalized throughout Korean society. According to the Ministry of Justice, the number of foreigners in Korea increased from 680,000 in 2003 to 1,000,000 in 2007. By February 2013, an additional 420,000 had migrant workers arrived in Korea. A representative example of racist-oriented migrant labor policy occurred immediately following the IMF crisis in 2008 when more than 70,000 undocumented workers, among them 150,000 migrant workers, were ordered to leave Korea immediately. The government allowed these workers to leave Korea without paying penalties for overstaying their work visasKang, S.D. 2000. Op. cit. while subsidizing the wages of Korean workers who replaced the ‘illegal’ migrant workers following their sudden departures. According to a report of OECDOECD, Employment Outlook 2015, OECD., the wage gap between native-born and foreign-born workers in Korea is the largest among the 22 OECD countries. Native-born workers in Korea receive 1.55 times more wages than foreign born workers, which stands in marked contrast to Italy and Spain, whose native-born workers receive 1.32 and 1.31 times more wages than those of foreign-born workers.

Moreover, a 2011 survey by the Joint Committee with Migrants in Korea showed that 78.2% of the 931 migrant workers who were interviewed have been verbally insulted by their employers and 43.9% have been the recipients of racially–motivated discrimination.Hankyoreh, April 20, 2013.<

In response, the Seoul-Gyeonggi-Incheon Migrants’ Trade Union (MTU), which was founded ten years ago but never legally acknowledged by Korean authorities, won a case it brought before the Supreme Court in August 2015 regarding the labor rights of migrant workers in Korea. The Ministry of Labor stood against the self-declared union, denouncing the latter as illegal. Despite the authorization of the Supreme Court, the Ministry of Labor refused to legalize the MTU because of its stated, and well-known, objectives. Afterwards, the MTU changed its organizational purpose from “abolishing the EPS (Employment Permit System)” and “granting amnesty for illegally residing migrant workers” to “improving the social and economic status of migrant workers,”Under the EPS since 2004, unskilled workers from 15 nations are allowed to enter Korea to work for up to three years in principle. at least on paper. Following these cahnges, the Ministry of Labor accepted their application.

According to government data, the number of legal migrant workers in Korea on the EPS visa at the end of 2014 was estimated at more than 270,000, with 52,760 having technically overstayed. Interestingly, the Ministry of Labor tends to connive at the illegal status of the undocumented workers, as they are useful especially for SMB. However, the Ministry of Justice has often ordered intermittent crackdowns on the illegal workers. Although undocumented workers in Korea can be guaranteed labor rights according to the Labor Law, they can be easily expelled by the Ministry of Justice. This inconsistency, for obvious reasons, tends to encourage the subtle exploitation of the migrant workers.

Following the 2010-2014 World Values Survey of 1,200 Koreans, 34% of respondents reported harboring hostile feelings about foreign-born residents, while 44% harbored negative feelings about migrant workers in Korea. Sadly, the level of Koreans’ acceptance of other ethnicities ranked 51st out of 59 surveyed countries. The leader of the Migrant Workers Union indicated that Koreans pity migrants but don’t respect them as human beings. “Many of them think we are poor and try to help us, but when we raise our voices, they point a finger at us.”Korea Herald, August 24, 2015.

Additionally, these four-faceted dualization or polarization processes, with insufficient welfare programs, have tended to accelerate the development of private insurances. Since 2000, the commercialization of welfare in Korea has begun to spread rapidly, especially in the period following the IMF crisis (1997-2001). For example, the national health insurance system (which was first institutionalized in 1977) adopted in 1989 was characterized by low premiums and low coverage, although Korean society is rapidly ageing with one of the lowest birth rates among the OECD countries. This has resulted in a rampant increase in private insurance subscribers. In 2009, for instance, almost 80% of households were paying into in private medical insurance plansJeong Y.H. “Survey on participation in private insurances with the data of Korean Medical Panel,” Health and Welfare Issues and Focus (in Korean), 70, 2011. in spite of having access to the national health insurance option.

There are clear signals of breakdown within the so-called middle-class in Korea. According to the national welfare panel survey conducted annually by the Korea Institute for Health and Social Affairs, the percentage of people who rose from low income in 2013 to the middle class or higher in 2014 was an all-time low of just 22.6%.The Hankyoreh (in Korean), January 28, 2015. Since 2006, upward mobility in Korea has decreased by more than 10%. Employment practices, which are partially responsible for Korea’s increasingly calcified social classes, have also become more entrenched. In 2013, for instance, some 83% of people were employed in either temporary or day labor jobs.

 

V. Concluding Remarks

There is a Korean proverb which says: ‘carry fire in one hand and water in the other’ (‘byung jugo yak jugo’). The debate on the Korean welfare state fits nicely into this axiom’s parameters. The primary risks people around the world are now facing stems mainly from capitalist development and increasing class antagonisms.

Above all, the Korean case can hardly be classified as a welfare state, because the state has never provided the (working) people with actual welfare programs. We may need another saying: ‘byung jugo mae jugo,’ meaning ‘carry fire in one hand and stick in the other.’ There are several reasons for maintaining such a posture, from cradle to grave.

First, childbirth is usually insured in Korea, but some related medical services, such as cesarean deliveries or ultrasonography are only insured on a case-by-case basis. Second, public schools are concentrated in the elementary and secondary levels, whereas universities are almost always private for which one must pay around 10,000 dollars. Third, one should save one’s earnings of more than 10 years to purchase an apartment unit or a house - so that one avoid a hard life moving from one rented room to another or paying unaffordable high rent deposit. Fourth, (un)employment insurance does not guarantee a life when losing one’s job , but functions as a social stigma, marking its recipients as ‘incompetent’ or ‘unworthy’ in the eyes of more well-to-do Koreans. Fifth, although the (struggling) unionists or workers officially have labor rights (combination, bargaining, and strikes), in reality, they enjoy none of them. Even under ‘democratic’ governments, hundreds of workers and citizens were arrested and/or dismissed because of social movements demanding more democracy.It means the (relatively democratic) governments after 1987 struggles: those of Roh TW (1988~1992), Kim YS (1993~1997), Kim DJ (1998~2002), and Roh MH (2003~2007). The following governments of Lee MB (2008~2012) and Park GH (2013~2017) clearly degenerated the quality of democracy in Korea. Sixth, those who have suffered industrial accidents not only lose their labor power but also their life in process, without satisfying care. Seventh, there is no pension for elderly people to live out a life of dignity in their twilight years. The elderly are not provided with free medical services for four major age-related diseases: cancer, cardiac disorders, cardiovascular diseases, and rare or incurable diseases.

Considering these sobering realities in contemporary Korea, one cannot call Korea a welfare state without a measure of self-deception. Classifying this reality as an “East Asian Welfare Model” or as a “Confucian” welfare state would be both superficial and misleading.

Rather, it would be better to say that the social movement including labor unions confronts an urgent task for a better future: Overcoming the four-faceted dualization between regular and non-regular workers, between male and female workers, between chaebol and non-chaebol workers, and between native and migrant workers. However, if the new movement does not make their own ‘recovery’ from the social and political trauma inflicted by capitalistic antagonism, it might, ultimately, not bear fruit.

In this context the minimal welfare programs developed by the semi-peripheral workfare state to deal with the discontents of the impoverished since Kim DJ government, can be interpreted as a ‘social governing technique’ or as a tool for ‘crisis management’. To finally climb into the core, i.e., to become ‘the number one,’ all the people should be so strictly controlled. In this way workfare in Korea seems to be welfare, which is far from genuine wellbeing of the people.