South Korean Labor Federations Rocked by Scandal, Turmoil

In South Korea, labor corruption makes headlines.  Less visibly, it makes them here, too.  On October 20, the entire leadership of that country’s largest and most powerful labor federation, the Korean Confederation of Trade Unions (KCTU), resigned in response to protests among its rank and file over scandals among senior officials.  The organization, with roughly 620,000 members belonging to nearly 750 unions, increasingly has been prone to economic militancy and anti-American sentiment in its ranks.  “The current leadership did everything it could to reinvigorate the labor movement through various internal reforms,” said KCTU President Lee Su-ho in his resignation speech.  “But we have decided to step down because of aggravated infighting between union reforms.”        


The federation was rocked by the arrest several weeks ago of its vice-president, Kang Seung-kyu, for allegedly taking $78,000 in bribes from taxi businesses in return for influence-peddling.  But that’s been only part of this year’s tally.  Earlier, three officials of Hyundai Motor Company’s labor union were arrested for taking bribes in return for job-placement guarantees.  At Kia Motors Corp., dozens of union members were indicted for the same offense; eight received prison sentences.  An official and former head of the employees’ union at Kookmin Bank, the nation’s largest lender, was arrested for embezzlement.  To top things off, dock workers union leaders have been accused of taking bribes in return for employee promotion and hiring.  The KCTU’s rival organization, the Federation of Korean Trade Unions, is also in turmoil.  Its former leader was arrested in May for taking kickbacks from a construction firm.       


The recent turn of events bear more than a passing relationship to affairs in the U.S.  National security concerns, of course, closely link our fortunes with South Korea’s.  There are roughly 37,000 American troops (set to dip below 30,000 by year’s end) stationed near and along the 38th parallel, ready for any hint of an invasion from North Korea.  Moreover, South Korea is a major trading partner.  In 2004 U.S. exports to that country totaled $26.3 billion (U.S. dollars); more telling, South Korea’s exports to America had reached $224.4 billion, a figure equivalent to about 2 percent of our own GDP.   The KCTU, now under heavy influence by militants, should become more aggressive once the new emergency governing body takes office.  Already, union restiveness has chased away substantial national and foreign investment.  Workers at Hyundai regularly have staged strikes since 1987, incurring a cumulative $7.8 billion loss to the company.  Nearly 8,000 unionized truckers, as of this writing, are on the verge of a general strike, following the lead of a walkout by 4,000 dump-truck operators.  Though disgust among union members over official corruption is justified, their increasingly confrontational response could raise the cost of U.S. imports.  (UPI, 10/20).