Employment Opportunities for South Korean Women Following the 1997 Crisis

Introduction

Although American patronage in the wake of the 1950-1953 Korean War heralded a halcyon period of effective developmental policies and rapid economic growth for South Korea, the lot of South Korean women remained contemptible for several decades. Indeed, women remained largely excluded from the labor market. The period of democratization that began in 1987 was conducive to the equalization of the labor market, as both gender inequality and wages gap fell perceptibly. In the ensuing decades, women’s participation in the national labor market grew, and some of them managed to break the glass ceiling to get the top-notch posts within companies. However, as the 1997 financial meltdown swept across Asia, reversing the positive tendencies of the last decade, the situation around employment opportunities for women in South Korea worsened again. Even as the national economy began to recover in the early 2000s, women still faced employment discrimination, often being forced to occupy only perfunctory part-time jobs. Likewise, the gender wage gap has persisted ever since. This paper seeks to explain the impact of the 1997 financial crisis on women’s employment opportunities in South Korea, tracing the changes to the present days. By extension, it also explains the current state of affairs surrounding female participation in the labor market, focusing on tendencies and challenges. Overall, the preliminary findings indicate that South Korea’s progress in empowering working women has been confused and halting at best since the 1997 financial crisis. It is not surprising than the country is the worst-performing OECD member in terms of women’s standing in the workforce.

 

Critical Analysis

South Korea’s Labor Market Before the 1997 Crisis

Historically, Korean women had been confined to their households. The Confucian ideology that reigned supreme in Korea until the mid-20th century sought to cultivate virtues of submission and subordination in women. Naturally, women seldom attended universities or held public offices. It was only in the wake of the 1950-1953 Korean War, during the so-called Miracle on the Han River period, that new leaders, backed by American overlords, embarked the country on the transformation toward liberal democracy. In the ensuing decades, women received appropriate training in the institutions of higher education and could, therefore, make meaningful contributions in the professional sectors of the country’s economy. Indeed, reflecting the growing role of women in the national economy, South Korea’s GDP skyrocketed from about $18 billion in 1953 to $125 billion in 1976 and to $258 billion in 1986 (see figure 1).

 

Figure 1. GDP Growth in South Korea, 1910-2010; Economy of South Korea; Wikipedia.com; n.d.; Web; 27 July 2016.

Apparently, the greater empowerment of women was not the only and, certainly, not the most important factor that stimulated economic growth in South Korea in the post-war years. Yet, the progress in female employment during the discussed period certainly made a seminal contribution to the country’s economic development, as the entry of educated women into the labor market facilitated higher levels of labor productivity and higher levels of technological innovation and adoption. Given that the rigid strictures of Confucianism still held fast in Korean society despite the process of liberalization, the progress in improving female participation in the national workforce looks similarly impressive. Figure 2 shows how the ratio of working women out of the total working female population rose between 1963 and 2014. It is clear from the graph that females’ participation in the labor market grew at a rapid pace between the early 1960s and 1990s, while the growth stunted following the 1997 crisis. According to Monk-Turner and Turner, not only the share of women in the national labor force increased, but also the gender wage gap reduced substantially in the late 20th century.

 

Figure 2. Women’s Economic Participation; Economic Report Card Released for Korea’s 70th; Korea JoongAng Daily; 11 August 2015; Web; 27 July 2016.

The Impact of the 1997 Crisis on Women’s Employment in South Korea

The 1997 currency crisis wrought havoc on the South Korean economy, affecting both men and women. In Korea, the crisis is not referred to as the currency crisis or the financial crisis, but rather as the 1997 IMF crisis, due to the role that the International Monetary Fund played in it. In 1997, Fackler argues, “the Korean economy almost collapsed under the weight of profligate corporate borrowing and a growing trade deficit and was forced to accept a $60 billion bailout from the IMF”. Fackler further explains that the crisis forced South Korea to close or, at least, restructure 12 of the nation’s 32 largest banks and precipitated the collapse of 14 of its largest industrial conglomerates. As South Korea’s industrial behemoths and other large employers faced shutdowns, an estimated 1.4 million citizens lost their jobs.

Apparently, the 1997 financial crisis in South Korea was a collective trauma commensurate in its magnitude to the Great Depression for Americans. Even so, it appears from the consulted literature that females were nonetheless disproportionately affected by the buffetings of the crisis. The crisis had the most severe impact on the traditionally male-dominated sectors of economy. Yet, it was the female population that suffered the most. The reason for this is straightforward: employers terminated women in the first turn. Harvie and Lee agree with Cho and his colleagues, adding that women “tended to be laid off before their male counterparts”. Thus, of 1.4 million South Koreans who lost their jobs in the aftermath of the 1997 financial crisis, the majority were women. In discharging women, employers neglected the 1987 Act on Equal Employment and Support for Work-Family Reconciliation, which sought to fulfill gender equality in employment. Few were concerned about this act though. What is more important, those males who lost their jobs scurried to find new jobs in the hitherto female-dominated personal service sector, “taking the female-male ratio down from 1:2.55 to 1:1.94”. In such circumstances, the share of women in the national workforce stopped growing. Indeed, whereas 60.7% of all economically active South Korean males were employed in 2000, only 48.3% of economically active South Korean women had jobs at the same juncture of history.

Another important implication of the 1997 financial crisis for South Korean Women was that it promoted or, at least, connived at discrimination against them. The jobs women managed to obtain were characterized by skimpy pay and inadequate working conditions, especially as compared to men. August and Tuten agree with this point, adding that female laborers in South Korea received 35% less than their male counterparts for the same job in 2004. In 2000, for example, as the South Korean government was already reining in the crisis, females earned an average monthly salary of 954,000 won, compared to 1,474,000 earned by their male counterparts. Hence, it is possible to conclude that the government had made little progress between 2000 and 2004.

Another discriminatory practice facilitated by the 1997 crisis was to relegate women to the reign of irregular employment. Back in 2004, Choi and Park pointed to the largely masculine working environments within Korean firms and corporations, which inevitably prevented the advancement of women in these inimical working environments. The persisting and debilitating effects of the 1997 crisis only complicated the problem, as company managers encouraged or blatantly pressured women to resign from their positions and accept reemployment as irregular employees. About 70% of all working South Korean women were involved in irregular employment for years following the 1997 crisis – the kind of employment that is seen by companies as a subterfuge to reduce labor costs. Other forms of employment bias against women included dismissing older women. For example, Song recalls an incident from 1999, when a gold club dismissed all female caddies over the age of 40 on the bogus grounds that they were “unfit to avoid accidents”. According to Harvie and Lee, not only private firms but also governmental agencies denied equal employment opportunities to women, as only 3% of women held senior management positions within national and local government agencies in the wake of the 1997 crisis. All this further perpetuated the wage disparity between South Korean males and females.

Current Situation around Female Employment in South Korea

The tentative gains made during the Miracle on the Han River period failed to cement and were now crumbling in the late 1990s. Unwilling to observe supinely as their working rights were trampled, South Korean working women organized various trade unions. The most significant among them was, perhaps, the National Korean Women’s Trade Union, established in 1999. The central government, too, made some efforts to alleviate the plight of working women. Thus, it amended and extended the 1987 Act on Equal Employment and Support for Work-Family Reconciliation. Similarly, it created the Ministry of Women in 2001. Still, the fate of working women remained woeful. Song explains: “Although the struggles of women cafeteria workers and golf game assistants helped dismantle assumptions about the unorganizability and passivity of women workers, the mainstream labor movement largely continued to view them as peripheral and atypical”. This persistent belief has stultified employment opportunities for South Korean women ever since the early 2000s. Additionally, this belief has helped to bring about, and later sustain the viability, of the deeply iniquitous irregular employment sector.

A related problem is the continued adherence to Confucian principles in some quarters of South Korea’s business society. Again, Confucianism emphasizes the subordination of women in society and their exclusion from the paid workforce. Even those women who have managed to overcome the Confucian logic are still expected to juggle their work and household responsibilities, with little help coming from their husbands. The roots of this problem reach deeper than the 1997 financial crisis. Yet, the 1997 crisis prompted some employers to re-embrace the outdated Confucian ideas on the grounds that the alien Western ways of doing business were partly responsible for the breakout of the nasty financial crisis in 1997. In any case, the reemergence and/or persistence of Confucian views of social organization in South Korea still militate against equal employment opportunities for women. Jayoung maintains that the ossified thinking inherited from the Confucian times that women are solely responsible for household maintenance is still prevalent in South Korea, thereby blighting women’s employment opportunities. Palley adds that Confucian customs are “socially mandated and often legally condoned”. Although 26 years have passed since Palley made this peremptory declaration, Confucianism continues to be socially mandated in some circumstances and continues to limit employment opportunities for women.

Another formidable challenge today is that national legislation still does not address many challenges facing working women. For one, as of 2012, obtaining a maternity leave without antagonizing the employer and without risking one’s future career remains problematic. But the biggest problem that requires regulation on the governmental level is irregular employment. South Korean women are fain to enter the field of irregular unemployment, because they are welcome in it and because it enables them to balance work and household responsibilities. Yet, Song argues that the field of irregular employment, in fact, is designed to camouflage dismal forms of gender discrimination. The government’s handling of the grotesquely iniquitous field of irregular employment is best described by the word “slipshod”. Song agrees with this conclusion, adding that irregular workers – most of them women – are stuck in a “legal limbo”, as different government agencies adopt contravening approaches to the matter.

Despite the overwhelming odds, South Korean women have persistently attempted to find decent employment since the early 2000s. They do not like their employment choices to be limited to the positions of salespersons and secretaries. Lee, So and Ju emphasize South Korean women’s growing enrolment in the institutions of higher education as a prerequisite for their subsequent participation in the national workforce. More specifically, the authors aver that the recent tendency of women to receive training in such sectors as technologies and biotechnologies improves their chances to find jobs in these crucial sectors of South Korea’s economy. Han, too, concurs in Lee, So and Ju’s statement that South Korean women’s greater access to higher education has been conducive to their subsequent advancement in the national workforce. More specifically, Han contends that women’s ever-increasing access to higher education in South Korea has increased their awareness about the working rights of women and contributed to the shrinking of the gender wage gap. The later statement is, however, difficult to corroborate.

Owing to their endurance, malleability and resilience that developed during the 1997 financial crisis, South Koreans rode out the 2008 financial crisis without all too evident problems. The crisis had little impact on the continued discrimination of women in the South Korean labor market. Even so, South Korean women still do not have access to equal employment opportunities. According to the OECD, the gender wage gap in South Korea stands at an alarming 35% as of 2014, marking a zero shift from the early 2000s. Similarly, South Korea is the worst-performing OECD country in terms of The Economist’s glass-ceiling index, largely because of its lack of women in executive positions within companies and government agencies. Samsung, for one, only hopes to have about 10% of its leadership positions held by females in the future.

Conclusion

This paper has shown that South Korea is the OECD’s worst-performing member in terms of female employment for a good reason. The country has exhibited little progress in creating equal employment opportunities for its working women since the 1997 financial crisis wrought havoc on the country’s economy. Although women’s economic participation increased from 48.6% in 2000 to slightly over 50% in the early 2010s, this quantitative improvement does not imply qualitative improvements. Indeed, the gender wage gap stands at an alarming 35%, just as a decade ago. Similarly, most South Korean women are still employed in the deeply iniquitous irregular sector. The government’s interventions have been largely ineffective in “leveling the playing field” for women. Further measures are needed to overcome this nettlesome problem. Yet, as a problem rooted in the unjust social organization, unequal employment opportunities for women will improve decidedly only when the ossified social dogmas re3garding women will sink into oblivion.

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Feb 8, 2020 in Socioligy
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