Korea

Abstract

From the mid-1960s to the end of the 1980s, (South) Korea gained worldwide attention for its rapid growth in gross domestic product (GDP) and exports and became one of the group of so-called Asian Tiger countries. With major government support, the large chaebol conglomerates such as Samsung, Hyundai and LG expanded to become world-famous brands. Korea’s GDP per capita at USD 25,977 in 2013 was higher for instance, than the comparable figures for the Central and Eastern European countries. Less well-known is that this growth miracle has been grounded on low wages and the oppression of labour. For three decades in Korea an independent trade union movement was not allowed and workers were denied the right to strike. Thus, wage bargaining was virtually impossible. Yet, after 1987 a democratic union movement arose that by the 1990s had achieved considerable gains. A minimum wage (MW), for example, was established with effect from January 1, 1988. At the time the Korean economy seemed to be on the way to leaving its low-wage base behind and heading towards an upgrade of its economic structure.