By Gerard Di Trolio
Thomas Mulcair would have you believe that free-trade agreements (FTAs) between developed countries are a good idea.
“I don’t mind being beaten out by a competitor on the manufacture of steel if they have labour rights, environmental rights and we’re on an even playing field,” Mulcair told The Record in Kitchener-Waterloo this past March.
The NDP, to its credit, has opposed FTAs with Colombia and Honduras over human rights concerns. But this concern with the well-documented human rights violations in these countries obscures how globalization, through FTAs, works to undermine labour standards even in advanced economies.
The South Korean situation is a perfect example of continuing pressures of globalization on labour rights. The labour movement in South Korea has a reputation for militancy dating back to the 1980s. It played a major role in working alongside civil society groups and students to bring an end to the U.S.-backed dictatorship that had ruled South Korea since the end of World War II.
Coming out of the dictatorship and into the 1990s, Korean workers made many gains and enjoyed low-income inequality while maintaining economic growth. The benefits to workers included pay based on seniority, and jobs for life.
Owing to global competitive pressure, South Korean companies sought to reform labour laws in late 1996, making it easier to lay off workers and make “non-regular” (precarious and contract employees) workers a larger part of the South Korean labour market. This was all done in the name of “flexibility.” Korea’s two major trade union centres – Korean Confederation of Trade Unions (KCTU) and Federation of Korean Trade Unions (FKTU), led the largest strike in South Korea’s history lasting from late December 1996 to the end of January 1997.
While the government withdrew the reforms, the Asian Financial Crisis of 1997 finally allowed neoliberal restructuring of South Korea’s labour market. Unemployment spiked to over seven per cent, from two per cent during the crisis badly damaging labour’s bargaining power. South Korea would eventually accept an IMF bailout package in 1998 that called for austerity and privatizations.
Here are some stark statistics that show the toll of neoliberal restructuring on the South Korean working class:
- South Korea’s Gini coefficient has increased to 0.315 in 2010, up from 0.258 in 1995.
- The top one per cent of South Koreans took home 16.6 percent of the national income in 2010. That’s slightly behind the U.S. at 17.7 per cent, but ahead of Canada at 13.3 per cent, the U.K. at 14.3 per cent, and Japan at 9.2 per cent.
- The top 10 per cent of the population own 46 per cent of South Korea’s wealth. The bottom 50 per cent owns 9.5 per cent.
- As of 2012, about 34 per cent of South Korean workers are classified as non-regular, making roughly 60 per cent of what a regular worker makes, and being far less likely to be able to access social insurance programs offered by the state.
- Non-regular workers are a feminist issue. 65.6 per cent of women in the South Korean labour market are non-regular workers.
- Union density in South Korea was at nearly 20 per cent in the late 1980s. It has now fallen to under 10 per cent.
Using the U.S.-South Korea FTA as an example, we know what to expect when Canada joins one. Unifor is estimating 33,000 jobs to be lost as a result of the Canada Korea Free Trade Agreement (CKFTA). However, some unions such as the UFCW, are supporting the CKFTA. UFCW claims it will increase exports of Canadian agricultural goods, which will benefit UFCW members in Canada. This view ignores the impacts this will have on Korean agricultural workers as well as the broader negative impact it will have for Canadian workers.
Signing new FTAs remain a bad deal for both sides, even if they are advanced economies. These deals do nothing to reverse the trend of increased precarious work, stagnant wages, and growing income inequality. FTAs simply bind nations into the global neoliberal order ever so tighter.