OPINION

[Editorial] Unnecessary cost

By Korea Herald

Wage cuts from shorter workweek push bus drivers to go on strike

  • Published : May 13, 2019 - 17:03
  • Updated : May 13, 2019 - 17:42

If unionized bus drivers around the country go on strike Wednesday as planned, it would mark yet another case of unnecessary social and economic costs being caused by ill-conceived policies implemented under President Moon Jae-in’s administration.

Nearly 38,000 drivers from 10 metropolitan cities and provinces have voted overwhelmingly to strike to demand a pay increase in time for the implementation of a mandatory 52-hour workweek in the bus industry this summer.

They complain that the shorter workweek, set to be enforced on bus companies with 300 and more employees from July, will result in a significant cut in their earnings. Many drivers are expected to suffer a wage reduction of up to 1 million won ($847) per month, or about 20 percent of their income, due to a loss of overtime pay.

The Moon administration last year introduced the rule to reduce the maximum weekly work hours to 52 from the previous 68 as part of its efforts to stimulate consumption and create more jobs.

The shorter workweek went into effect in July 2018 for firms with 300 and more employees, but bus operators were given a one-year grace period.

An umbrella group of bus drivers’ unions decided Friday to go on a nationwide strike if last-ditch negotiations with management under the arbitration of the labor relations commission fail to reach an agreement by the deadline set for Tuesday.

It now seems hard to secure an agreement to avoid the looming public transportation chaos around the country.

The struggling bus companies have asked for fare increases and other financial support, saying they cannot afford to cover the rise in labor costs demanded of them under the 52-hour workweek system.

The Transport and Employment ministries have put pressure on municipal and provincial governments to raise fares for bus operators in their regions. But local government heads remain reluctant to do so out of concerns that the measure would anger residents who are having difficulties making both ends meet amid a deepening economic slump.

Officials in the Moon administration have insisted that the strike planned by drivers has little to do with the implementation of the shorter workweek, noting that many bus companies facing labor walkouts are already operating under the 52-hour workweek rule.

But most drivers at bus companies operating outside of Seoul actually take the wheel more than 52 hours per week, even though their employers are regarded by the government as having adopted the shorter workweek system.

Furthermore, demands for wage hikes will be heightened as the shorter workweek is set to be applied to bus companies with less than 300 employees -- which tend to pay more overtime pay -- gradually in January 2020 and July 2021.

It could well have been expected that the introduction of the shorter workweek without considering possible costs to be incurred by the measure would lead to disruptive situations like the planned strike by bus drivers.

Many private institutes suggested estimates of economic and social costs the new workweek system would cause. But administration officials and ruling party lawmakers rushed to pass the bill to cut work hours without paying heed to how to cover such costs.

Unlike their expectations, the shorter workweek has done little to boost consumption and increase jobs, as workers who are paid less spend less and companies remain reluctant to hire more workers amid worsening business and employment conditions.

The government is considering putting more subway cars into operation and operating chartered buses in preparation for a possible walkout by bus drivers.

Such measures, however, would fall short of avoiding chaos in public transportation, if nearly 20,000 buses suspend operations around the country.

Raising bus fares to meet the demand of drivers would result in passing the costs of unscrupulous policy to ordinary citizens.

The Moon government needs to consider changing the 52-hour workweek system to help lessen the burden it is placing on the bus industry and other sectors.

The administration’s policy push without calculating costs is not limited to the shorter workweek system.

It has kept mum on how much costs would be incurred by its policy to phase out nuclear power generation and replace it with renewable sources. Experts estimate the nuclear phase-out policy pursued since Moon took office two years ago has led to losses amounting to 1.2 trillion won for state-funded energy companies.

The Moon government should try to enhance the credibility and transparency of its policies by analyzing and disclosing their accurate costs and possible side-effects.