Development of Social Insurance in Korea and the Role of Trade Union

Transcription

1 e-labor News No. 73 Issue paper * This paper was presented at the international seminar on The Development of Social Insurance and the Role of Trade Unions organized by the Korea Labor Institute in Seoul, Korea on 30 October Development of Social Insurance in Korea and the Role of Trade Union Dr. Habil. Jo-Duk Yoon Director Advanced Labor-Management Program Korea Labor Institute yoonjd@kli.re.kr 1. Development of the Social Insurance and Social Welfare System in Korea Transitions in Korea s welfare system including social insurance programs, the basis of social policy, are characterized by the introduction and expansion of new welfare systems during the economic boom. <Table 1> Two of the most significant changes were made in the early 1960s when the economic development plan was in its initial phase and in the late 1980s when the welfare system was in its introduction and expansion phase. In the meantime, the medical security system, which continues to have the biggest impact, was introduced and implemented in the mid to late 1970s and the introduction of social insurance was completed in the mid to late 1990s. This period also witnessed the growing importance of private welfare and the influence of the economic and political situation on social welfare

2 marking another transition in the history of welfare system. (Soon-il Bark, 1997, p.49) In addition to the introduction and expansion of the welfare system in relation to economic growth, it would be meaningful to analyze the welfare system in relation to political situations. Various social insurance acts including the Industrial Accident Compensation Insurance Act were legislated in the early 1960s during the military regime that seized power through a military coup on May 16th, The military regime that lacked legitimacy pursued establishing a welfare state by laying the foundation of a social security system as one of its policy agendas and in 1962 formed the Social Security Advisory Committee to seek legislation to expand the social security system by conducting research on the social security model that could be applied to the Korean society. The late 1970s were the times of uprisings of college students, intellectuals and labor class against the authoritarian regime and this led to the Declaration of Democratic Reforms on June 29th, 1987 spreading democracy to all sectors of the society during the mid to late 1980s. <Table 2> shows related Acts and Legislations regarding the welfare system including social insurance in chronological order. Among social insurance, the Industrial Accident Compensation Insurance Act was the first Act introduced and enforced in The National Pension Act was enacted in 1973 but was only later enforced for the general public in In 1976, employees were first provided with Medical Insurance and then the Employment Insurance System was enacted in 1993 and later enforced in Long-term Care Insurance for the Elderly is planned to be enforced from In order to protect workers, the Labor Standard Act that stipulates minimum working condition was enacted in 1953 and a Minimum Wage System was put in place in In order to protect the livelihood of the low-income class, the Protection of Minimum Living Standards Act was enacted in 1961 and the plan for protecting 100% of the minimum cost of living was devised in the late 1990 s To protect the welfare of vulnerable classes including children, juveniles, the disabled and the elderly, the Child Welfare Act was enacted in 1961 followed by the Welfare of the Aged Act, the Welfare Act for Handicapped of Mind and Body and the Mother and Fatherless Child Welfare Act which were all enacted in And finally, the Infant Care Act and Framework Act on Juveniles were enacted in Also, the Employment Promotion of Disabled Persons Act, the Act on Promotion and Guarantee of Access for the Disabled to Facilities and Information, and the Employment Promotion and Vocational Rehabilitation of Disabled Persons Act were enacted and enforced in 1990, 1997 and 2001 respectively.

3 <Table-1> Development of Welfare system, economy and politics in Korea 1960s : Introduction Mid 1970s: First Transformation Economic Development Changes in Welfare System Changes in Political Situation Growth and distribution have yet to Enactment of life insurance system Development of the military be established and various social insurance regime Light industry programs were enacted Social security policy was needed to secure legitimacy for the military regime Per capita GNP of $500-1,000 Quantitative growth no longer effective Surplus labor no longer exists, Surplus in the international balance of payments, Capital-intensive heavy chemical industry Speculation boom in real estate and securities Introduction of medial insurance Authoritarian regime extended and medical care and resistance grew Mid to late1980s: Second Transformation Mid 1990s: Third Transformation Per capita GNP of $2,000 * -3,000 Implementation of National Protecting the regime against Technology-intensive industry Health Insurance strikes and social conflict and Overseas labor inflow begins, Introduction of National Pension meeting the demand for welfare Speculation boom in real estate and Strengthening of welfare for the Growing resistance against securities, elderly and the disabled military regime led to the Increase in conspicuous consumption Improvement in real estate policy declaration on democratization and relative poverty Per capita GNP of $10,000 ** Decrease in investment on welfare Civilian government s efforts to Restructuring industry to enhance as the economic cost increases pursue economic and political quality for sustainable The pursuit of high-quality welfare reform growth-competitive management, and introduction of regional High-wages and increase in labor pension and employment income insurance Focus on the role of private welfare Late 1990s, early 2000s: Fourth Transformation Economic crisis due to foreign Productive welfare and Expanding welfare system exchange crisis and restructuring to participatory welfare overcome the crisis Foreign investment Development of IT industry, * Japan s per capita GNP in early 1970s, that were called the years of welfare, was around $2,000 as its per capita GNP of 1970 recorded $1,948. This period witnessed the improvement in welfare with the increased benefits of pension and health insurance and enhanced social assistance. ** Per capita GNP of $10,000 was achieved in the United States in the late 1970s when welfare disease became as a major issue, whereas Japan reached a per capita GNP of $10,000 in the mid 1980 s and its welfare system was in a mature phase (reference: supplemented based on Soon-il Bark,1997, p.52)

4 <Table 2> Social insurance and welfare system in Korea National Pension Act enacted but yet to be enforced (73), Pension for Private School Teachers and Staff Act (73) Medical Insurance Act revised (76) and enforce (77), Medical Insurance Act enacted, Act on Medical Insurance for Public Officials and Private School Teachers and Staff enacted (79) Small and Medium Enterprise Workers Act (93) Social Welfare Services Act Mother and Child Health Act enacted (70) enacted Framework Act on Vocational Training enacted (76), Vocational Training Promotion Act on the Promotion of Education Fund Act enacted (76), for the Handicapped enacted (77) Act on the Special Compensation to Defecting North Korean Soldiers enacted (78) Child Welfare Act revised (81), Welfare on the Aged Act enacted (81), Welfare Act for Handicapped of Mind and Body enacted (81) Mother and fatherless Child Welfare Act enacted (89), Act on the Equal Employment for Welfare of Child, the Aged and Both Sexes enacted (87), Disabled Persons enacted (89), Act on the Encouragement of Employment Promotion of Technical Skills enacted (89) Disabled Persons Act enacted (90) Infant Care Act (91) and Labor Framework Act on Juveniles National Health Promotion Act enacted (91), (94) Employment Promotion for the Center for Home Volunteer Service established Framework Act on Employment Policy enacted (93) Year Protection of livelihood and Social insurance Welfare for vulnerable class Other s workers Public Officials Pension Act Labor Standards Act (53), Disaster Relief Act for Seaman and enacted and enforced (60) and Protection of Minimum Military Personnel enacted (62), amended (62), Living Standards Act Child Welfare Act enacted (61) Labor Union Act Military Personnel Medical enacted (61), Environmental Pollution Prevention 1965 Insurance Act enacted (63), Employment Security and Act Industrial Accident Compensation Protection Act enacted (61) Insurance Act enacted (63) and enforced (64) Social Security Act enacted and Social Security Advisory Committee established Enforcement Decree of Korea Association of Social Coverage of Industrial Accident Employment Security Act enacted Protection of Minimum Workers established (66) 1969 Compensation Insurance expanded Living Standards Act Protection of Minimum Living Standards Act Industrial Safety and Health Act revised (82), 1985 enacted (81) Act on the Prevention of Pneumoconiosis (84) Health insurance expanded to cover Minimum Wage Act oriental medicine (87), enacted (86) and enforced agricultural and fishing village (88), (88), 1990 cities(89) pharmacy insurance (89) Regulation on Management National Pension System enforced of Homeless Assistance (88) Center (87) Intra-Company Employment Insurance Act Welfare Fund Act enacted enacted (93) and enforced (95), (91), 1995 National Pension System applied to Promotion of Welfare for Aged Act (91), agricultural and fishing village (95) Act on the Promotion of Access for Health insurance benefits expanded the Disabled to Facilities and Framework Act on Social Security (96), Insurance for urban self Minimum Livelihood Information enacted (97), 2000 enacted and enforced (96) -employed (98) Protection Plan (96-98) Public Health and Medical Services Act enacted (00)

5 Special Act to Stabilize National Health Insurance Finances enacted (02) 2006 Reference: supplemented based on Sae-jin Nam, Heung-sik Cho, 1995, pp Framework Act on Health and Medical Services enacted (00), Oriental Medicine Nurturing Act Employment Promotion and enacted (03), Vocational Rehabilitation of Cancer Management Act enacted Disabled Persons Act enacted (00) (03), Special Act on Health Care for Framework Act on Healthy Inhabitants of Rural and Fishing Villages enacted (04) Families enacted (04), Act on the Collection of Excess Profit from Rebuilding Projects (06)

6 2. Expansion of Social Insurance System The four pillars of the social insurance program, Industrial Accident Compensation Insurance, Employment Insurance System, National Health Insurance, and the National Pension System, have undergone the following expansion process Expansion of Industrial Accident Compensation Insurance Since its introduction, coverage and benefits have continued to expand Expansion of Coverage In 1964 when Industrial Accident Compensation Insurance was first introduced, it applied to workplaces with 500 or more employees in mining and manufacturing industries covering 64 workplaces and 81,798 employees. In 1965, the coverage expanded to include the workers of firms with over 200 employees. Later, the electric, gas, transportation, and warehousing industries were added. The coverage has continued to expand to all workplaces with at least one worker, with the exception of certain industries from July 1st, 2007, and at the same time small and medium sized companies with less than 50 employees are allowed to join at their discretion. Since Jan 1st, 2005, the insurance started to cover the self-employed by first covering those who are in passenger and cargo transportation industry using their own vehicle at their discretion <Table 3>. As of late 2005, this insurance system covers 1,175,606 workplaces and 12,069,599 employees. Industrial Accident Compensation Insurance does not cover businesses covered under the Public officials Pension Act, Veterans Pension Act, Seafarers Act, Fishing Vessels and Their Crew Members Accident Compensation Insurance Act or Pension for Private School Teachers and Staff Act, or those businesses engaged in a construction project with the total cost of less then 20 million won operated by non-construction professionals and businesses with less than 5 employees run by a non-corporation in housekeeping services and the agriculture, Forestry, Fishing, and Hunting industries. (Article 3 of the Enforcement Decree of the Industrial Accident Compensation Insurance Act)

7 In addition, the Industrial Accident Compensation does not cover an estimated 700,000 to 900,000 workers engaged in special forms of employment. <Table 3> Expansion of coverage by the size of company and the type of industry Year Workplace size Industry workers or more Mining, manufacturing workers or more Electronic and gas, transportation and warehousing workers or more workers or more Term-based projects (25,000 workers or more annually) 1969 Construction, service, water and sanitation facilities, telecommunication created workers or more (5) workers or more Mining, Manufacturing (chemical, coal, oil, rubber, plastic manufacturing- 5 workers or more) (5) workers or more Logging (5) workers or more Agricultural products sales on consignment and Brokerage of agricultural products added (5) workers or more 14 industries including veneer manufacturing- 5 workers or more (5) workers or more 20 industries including manufacture of carpentry and joinery- 5 workers or more workers or more 16 industries including electronic manufacturing- 5 workers or more (10) workers or more Mining, forestry, fishing, hunting, wholesale, retail, real estate-expanded to cover 10 workers or more workers or more Mining, forestry, hunting, wholesale, retail, real estate- 5 workers or more workers or more Education service, health and social welfare program, research and development business workers or more Special application for workers stationed abroad (at their discretion) and interns (mandatory) Finance and insurance industry added (5) worker or more Members and groups of International and foreign organization, other public, social and private service industries added, Owners of small and medium enterprises can apply at their discretion (5) worker or more Programs conducted by Government and local governments added (5) worker or more Self-employed can apply at their discretion Ministry of Labor, 2005 Annual Report on Industrial Accident Compensation Insurance, 2006, pp

8 Expansion of Benefits Benefits provided under the Industrial Accident Compensation Insurance are the medical care benefit, wage replacement benefit, disability benefit, survivors benefit, injury-disease compensation, nursing benefit, and funeral expenses. In 1964, the first year the Industrial Accident Compensation Insurance was enforced, the medical care benefit was provided for workers who received medical care for more than 10 days due to an industrial accident Since then the coverage has expanded to cover the medical expenses of more than 7 days in 1971, and more than three days in <Table 4> Wage replacement benefits amounted to 60% of average wages in 1964 and increased to 70% in In 1971, when the system was introduced, disability benefits of an average of 240-days wages (65.8% of annual average wage) and 188-days wages (51.5%) were provided to those classified as disability grade 1 and disability grade 3 respectively. Since then, the benefit has expanded to 329-day (90.1%) for disability grade 1, 257-day (70.4%) for disability grade 3, and 138-day (37.8%) for disability grade 7. Survivors benefits amounting to 30% of annual average income were provided to families with one surviving member and 45% to families with four in 1971 when the system was first introduced. Then the benefit increased to 52% of annual income for 1 survivor and 67% for four survivors in 1982.

9 <Table 4> Qualifications and level of benefits of IACI by types of benefits Types of benefits Qualifications Level of benefits Improved level of benefits Provided to a worker who is injured or got disease from industrial accident and receives medical care 1964: Medical care for 10 days or more Medical care for 3 days or longer. (In case of disease or injury that The entire amount of 1971: Medical care for 7 days or more benefit can be treated within 3 days, employers provide medical care 1982: Medical care for 3 days or more compensation according to the Labor Standards Act) Provided during a period of no-work of 3 days or Wage replacement 70% of individual average 1964: 60% of average wages more resulting from medical treatment due to the benefit wages 1989: 70% of average wages industrial accident (Exception for 3 days or less) 1971: 240-day average wages to grade 1 (65.8%) 213-day average wages to grade 2 (58.3%) 188-day average wages to grade 3 (65.8%) Disabilit y benefit Survivors benefit Provided to a worker who still has a disability with 329-day average wages disability grade from 1 to 3 even after medical (grade 1: 90.1%) ~138-day Annuity treatment. Those with disability grade from 4-7 can average wages (grade 7: choose annuity or lump-sum payment. 37.8%) Lump -sum Provided to a worker who still has a disability with 1,012-day average wages disability grade from 8 to 14 even after medical (grade 4) treatment. Those with disability grade from 4-7 can ~ 55-day average wages choose annuity or lump-sum payment. (grade14) On the basis of 47% of annual basic wages to a Provided to surviving family members when a family with 1 surviving Annuity worker dies in an industrial accident in the form of member, 5% added per an annuity or in an lump-sum additional member Upper limit: 67% 1977: 297-day average wages to grade 1 (76.4%) ~ 219-day average wages to grade 3 (60.0%) 1982: 313-day average wages to grade 1 (85.7%) ~ 131-day average wages to grade 7 (35.9%) 1989: 329-day average wages to grade 1 (90.1%) ~ 138-day average wages to grade 7 (37.8%) 1964: 1,000-day average wages (grade1) ~50-day average wages (grade10) 1971: 1,340-day average wages (grade 1) ~ 50-day average wages (grade 14) 1989: 1,474-day average wages (grade 1) ~ 55-day average wages (grade 10) 1971: 30% to a family with one surviving member ~45% to a family with 4 surviving members 1977: 45% to a family with one surviving member ~60% to a family with 4 surviving members 1982: 52% to a family with one surviving member ~67% to a family with 4 surviving members 2000: Annuity became mandatory (50% in a lump-sum can be provided exceptionally) Lump 1964: 1,000-day average wages 1,300-day average wages -sum 1989: 1,300-day average wages Provided when a worker dies in an industrial 1964: 90 days of average wages Funeral expenses 120 days of average wages accident 1989:120 days of average wages Provided with the medical care benefit to a worker Injury-Disease who is diagnosed with a disability while receiving The same with disability 1983:Injury and disease compensation pension created compensation medical care for more than 2 years. (cannot be grade 1-3 provided with the wage replacement benefit) Constant care: Provided to those who are in need of nursing care or Created in ,240 won/day Nursing benefits who is receiving nursing care after completion of Care on demand: 25,490 Amended and notified by Minister of Labor treatment won/day annually Provided according to the Industrial Accident Special benefits calculated Compensation Insurance Act along with survival s by the Leibniz s method are Special benefits benefit and disability benefit to a worker when provided added to the industrial accident happens accidentally or insurance benefit intentionally by the insured, Reference: Ministry of Labor, Annual Report on Industrial Accident Compensation Insurance, 2006, pp

10 2. 2. Expansion of Employment Insurance Since its introduction, coverage and programs have continued to expand Expansion of coverage In July of 1995 when Employment Insurance was first introduced and enforced, Unemployment Benefits covered workplaces with more than 30 employees, and Employment Security and Vocational Ability Development applied to workplaces with more than 70 employees and construction projects with the total cost of 4 billion won. From July 1998, workplaces with more than 10 workers were covered by Unemployment Benefits and Employment Security and Vocational Ability Development applied to workplaces with more than 50 employees and construction projects with the total cost of 3.4 billion won. These three benefits continued to expand to include workplaces with more than 1 employee and construction projects with the total cost of 20 million won. <Table 5> As of late 2006, Employment Insurance covers 1,176,000 workplaces and 8,540,000 employers. (Korea Labor Institute, 2007 KLI Labor Statistics, p.41) Types of businesses and workers not covered by Employment Insurance include those aged 65 and over, those who are covered under Public Officials Pension, Pension for Private School Teachers and Staff, businesses with less than 4 employees run by a non-corporation in agriculture, forestry, fishing, and hunting industries, construction projects with a total cost of less then 2 million won carried out by non-construction professionals, housekeeping services, workers who work less than 60 hours a month (Including those who work less than 15 hours a week), specially designated post office employees, foreign workers, (Article 8 of Employment Insurance Act, Articles 2 and 3 of Enforcement Decree of Employment Insurance Act) and workers engaged in special forms of employment.

11 <Table 5> Employment insurance coverage expansion Size of companies covered ~ ~ ~ ~ ~ ~ ~present Unemployment benefit 30 and more 30 and more 10 and more 5 and more 5 and more 1 and more 1 and more Employment security program, Vocational ability development program 70 and more 70 and more 50 and more 50 and more 5 and more 1 and more 1 and more Construction industry 4 billion won (Total construction cost) 4.4 billion won 3.4 billion won 3.4 billion won 340 million won 340 million won 20 million won Note: Construction industry is the basis on which three programs (unemployment benefit, employment security, and vocational ability development program) are applied Reference: Ministry of Labor 10 Year history of Employment Insurance ( ), 2006, p Employment Insurance System Since its inception in July 1995, the Employment Insurance System has been expanded and its role as a social safety net has been strengthened as Korean companies underwent massive restructuring under IMF management due to the economic crisis in The 37 programs under the Employment Insurance System include 7 programs including Job-seeking Benefits under the Unemployment Benefit, 2 programs of Maternity Leave Allowance and Childcare Allowance under Maternity Protection, 3 programs of Support for Employers and 5 in Support of Workers under Vocational Ability Development, 5 programs of job creation, 3 programs of employment adjustment, 6 programs of employment promotion and support for the aged, and another 6 programs of employment stabilization under Employment Security. <Table 6>

12 <Table 6> Details of Employment Insurance Program Unemployment benefit Post natal leave, childcare leave allowance Employment stabilization, vocational ability development program Details 1 Job-seeking benefits 2 Extended training benefits, 3 individual extended benefit, 4 Early reemployment allowance, 5 Vocational ability development allowance 6 Wide-area job seeking allowance 7 Moving allowance 1 Post natal leave (stillbirth, miscarriage) allowance 2 Childcare leave allowance Vocational ability development program (support for workers) 1 Subsidy for taking classes 2 Loans for school expenses 3 Loans for vocational ability development expenses 4 Qualifications and course fees, 5 Re-employment training for the unemployed Vocational ability development program (support for employers) 1 Support for vocational ability development training support 2 Support for training on paid leave 3 Training facilities of vocational ability development 4 Loans for equipment of vocational ability development Vocational ability development program (job creation) 1 Subsidy for reduced working hours for small and medium sized company 2 Subsidy for shift working system 3 Subsidy for improving SME s working conditions 4 Subsidy for encouraging SME to hire professionals 5 Subsidy for SME to advance into new industry Employment stabilization program (employment adjustment) 1 Subsidy for maintaining employment 2 Subsidy for switching jobs 3 Subsidy for re-employment Employment stabilization program (employment promotion and stabilization for the aged) 1 Subsidy for hiring the aged 2 Subsidy for hiring new employees 3 Subsidy for hiring middle and old aged who completed training 4 Subsidy for childcare leave and hiring replacing workers 5 Subsidy for wage peak system 6 Subsidy for continuing employment during pregnancy and after childbirth Employment stabilization program (other employment stabilization) 1 Subsidy for diagnosis on employment management 2 Subsidy for dislocated worker in starting the self-employed business 3 Subsidy for improving the condition for employment 4 Subsidy for building and running childcare facility in workplace 5 Subsidy for severance pay 6 Subsidy for employment stabilization of construction workers

13 3. Government s Social Policy This study reviews Korea s major social policies by administration starting in the early 1980s and focusing on the health and welfare policy of the Ministry of Health and Welfare and labor policy of the Ministry of Labor From 1981 to 1987 This period was the fifth Republic under the military regime ruled by President Chun Doo-hwan Health and Welfare Policy Major health and welfare policies can be broken into the following six areas. First, foundation for universal health care and expansion of insurance coverage: health insurance was introduced on July1st, 1977 as workplace health insurance and expanded to cover government employees, private school teachers, and retire pension beneficiaries from July 1st, 1981, and included Veterans Pension beneficiaries from October 10th. Also, pilot program of Regional Insurance, beginning on July 1st, 1981 was carried out in rural areas including Hongcheon, Okgu and Jinwi as a preparatory step to expand the health insurance to farmers, fishermen and the self-employed. Also, from December 1981, health insurance by occupation was introduced to cover the self-employed in urban areas. (Ministry of Health and Social Affairs, Health and Social Affairs, 1987, pp ) Second, population control policy: when the 5th 5-Year Economic and Social Development Plan was devised, population control policy was established. Third, disease prevention system: to prevent outbreaks of cholera, encephalitis, polio, and other infectious diseases, the advancement of a disease prevention system was pursued. Fourth, strengthening of support for low-income class and vulnerable class: In an effort to strengthen livelihood protection program and break the vicious cycle of poverty, Protection of Minimum Living Standards Act was amended (Act 3623, Dec.31, 1982) and public assistance program was developed from passive livelihood support measures for those who are not capable of working into active support

14 measures to train them and help them stand on their own feet. In addition, a comprehensive welfare system for the disabled was established to 1) government support for the livelihood of the severely disabled who cannot work 2) help the disabled who can work stand on their own feet through job training and 3) remove the barriers the disabled face in participating in society. Fifth, enactment of Welfare of the Aged Act: as the population of the aged increased and nuclear family type expanded, Welfare of the Aged Act stipulated how to deal with issues regarding the aged and their care. Sixth, improved opportunity for women to participate in social development: to achieve this goal, the Korean Women s Development Institute was established and the Women s Policy Deliberation Committee headed by Prime Minister was launched in Also, Planning Committee for Women s Development was created under the 5th 5-Year Economic and Social Development Plan ( ) to utilize female workforce and enhance women s capability Labor Policy During the early to mid 1980s( ), the labor policy consistently pursued the stabilization of labor management relations, employment security, and labor welfare improvement. Major policies focused on nurturing and training skilled workers, preventing industrial accident and expanding the coverage of Industrial Accident Compensation Insurance. <Table-7>

15 <Table 7> Major tasks of labor policy ( ) Basic goals Labor and management cooperation & employment security Labor and management cooperation & employment security Labor and management cooperation & employment security Employment security & labor welfare improvement Labor welfare improvement & employment security Stabilization of labor management relations & labor management coexistence Major tasks 1) Establishing cooperative industrial relations 2) Nurturing and further developing skilled workers 3) Promoting employment security 4) Improving working environment 5) Improving labor welfare 6) Expanding the coverage of Industrial Accident Compensation Insurance 1) Promoting cooperative industrial relations 2) Promoting employment security 3) Improving labor welfare 4) Strengthening prevention of industrial accident 5) Providing special training to skilled workers 6) Strengthening management of Industrial Accident Compensation Insurance 1) Establishing productive industrial relations 2) Strengthening prevention of industrial accident 3) Promoting employment security 4) Nurturing highly skilled workers 5) Improving labor welfare 6) Securing working condition 1) Establishing productive industrial relations 2) Improving labor welfare 3) Balancing the demand and supply of workers 4) Improving employer s vocational capability 5) Preventing industrial accidents 6) Improving working condition 1) Promoting employment security 2) Stabilizing industrial relations 3) Improving working condition 4) Improving labor welfare 5) Providing vocational training needed in industrial society 6) Strengthening prevention of industrial accidents and expanding the coverage of Industrial Accident Compensation Insurance 7) Protecting juvenile workers 8) Proactively pursuing labor diplomacy 1) Developing cooperative industrial relations 2) Improving labor welfare 3) Promoting employment security 4) Strengthening system of nurturing skilled workers 5) Preventing industrial accidents and improving working conditions 6) Expanding the coverage of Industrial Accident Compensation Insurance Ministry of Labor, White Paper on Labor, 1983, p. 7, 1984, p. 53; 1985, p. 3 쪽 1986, pp. 3-4; 1987, pp. 3-4; 1988, p From 1988 to 1992 This period( ) was the 2nd military regime ruled by President Roh Tae-woo. During this period, the 6th 5-Year Economic and Social Development Plan was drawn up and implemented.

16 Health and Welfare Policy Major health and welfare policies are divided into the health and medical sector and social security sector. First, health and medical sector: the health insurance program that was initiated in 1977 expanded to cover farming and fishing villages in 1988 and urban areas in July 1989, after only 12 years, universal health insurance coverage for all Korean citizens was accomplished. In line with the coverage expansion, healthcare facilities and healthcare personnel have continued to expand in farming and fishing villages. In addition, to improve food sanitation and to secure safety of food and drug, related standards were established and improved. (Ministry of Health and Social Affairs, White Paper,.1992, p. 3). Second, social security sector: foundation for the social security system was laid through the healthcare program, construction of public rental housing, and introduction of a minimum wage system. To be specific, the National Pension Act was amended (Dec. 30, 1998) so that it was workplace based from Jan 1st, In addition to this, 170,000 units of public rental housing were constructed and provided to the low-income class in urban areas. Old-age allowance was paid out to recipients of the Livelihood Program aged 70 and older and Employment Promotion for the Aged Act was enacted in Also, Employment Promotion of Disabled Persons Act was enacted in 1991 for vocational rehabilitation of the disabled as well as a minimum livelihood for minor-aged heads of household was protected. Projects for improving opportunities for women to develop their capabilities and participate in social development were also launched. (Ministry of Health and Social Affairs, White Paper,.1992, pp. 3-10) Labor Policy The basic goals of labor policy from the late 1980s to the early 1990s were establishing labor and management co-existence in the late1980s and restoring export competitiveness by stabilizing industrial relations in the early 1990s. <Table 8> To achieve these goals, tasks such as stabilizing industrial relations, improving wages and working conditions, preventing industrial accidents, as well as protecting workers injured from industrial accidents, promoting employment and nurturing skilled workers were pursued.

17 <Table 8> Major tasks of labor policy ( ) Basic goals Major Tasks 1) Stabilizing labor management relations 2) Expanding labor welfare programs Establishing harmonious and cooperative 3) Improving working conditions and preventing industrial accidents 1988 co-existence of labor and management 4) Facilitating employment stabilization 5) Realizing a society where skilled workers are rewarded 6) Strengthening Industrial Accident Compensation Insurance 1) Reaching national consensus for the 1) Developing labor management relations, development of industrial relations 2) Improving wages and working conditions, 2) Laying the foundation for middle-income 3) Improving labor welfare 1989 classes increasing the real income of workers 4) Preventing industrial accidents and protecting workers injured from 3) Realizing trusted labor management by industrial accidents enhancing professionalism 5) Promoting employment and further expanding skilled workers 1) Developing labor management relations, 2) Realizing reasonable wage and Improving working conditions 3) Improving labor welfare 1990 Establishing industrial peace 4) Preventing industrial accidents and protecting workers injured from industrial accidents 5) Promoting employment and further expanding skilled workers 1) Stabilizing wage and industrial relations, 2) Improving labor welfare and working conditions 3) Preventing industrial accident and protecting workers injured from industrial accidents 1991 Revitalizing the industrial society 4) Expanding nurturing skilled workers and guaranteeing employment security 5) Preventing industrial accidents 6) Improving working conditions 1) Stabilizing labor management relations and wage Establishing the foundation for economic ) Improving working conditions to encourage work stabilization and restoring export competitiveness 3) Balancing the supply and demand of workers Ministry of Labor, White Paper on Labor, 1989, p. 3; 1990, p. 4; 1991, pp. 3-4; 1992, p. 3; 1993, p From 1993 to 1997 In 1993, President Kim Yong-sam, a civilian, was sworn in, establishing a civil government. During his administration, a new 5-Year Economic Development Plan was the focus of his policy agenda.

18 Health and Welfare Policy The new 5-Year Economic Development Plan of the Kim administration set 26 policy tasks with the goal of joining the ranks of advanced economies by reforming both the economic system and people s mindset regarding their participation and creative development. (Ministry of Health and Social Affairs, White Paper on Health and Social Affairs, 1993, pp. 3-4) Basic goals of social welfare policy are 1) enhancing efficiency of the welfare policy by strengthening the current system and improving interoperability of welfare systems, and promoting public welfare by drawing up social welfare policy in line with the national development, 2) expanding the National Pension System to include farmers and fishermen, protecting basic livelihood of low-income and vulnerable classes, and expanding and improving social welfare projects by encouraging the participation of the private sector, 3) expanding access facilities for the disabled, promoting employment of the disabled and utilizing a dormant labor force by expanding childcare facilities, thus balancing welfare and economic development in which improved welfare can contribute to economic development, and 4) providing convenient medical service by strengthening disease management including cancer and mental disease, improving the emergency care system and nurturing and developing oriental medicine, and promoting public health by strengthening safety management of food and drugs Labor Policy The major goal of labor policy during this period was securing industrial competitiveness and enhancing international confidence by creating a new industrial culture of participatory and cooperative labor and management relations. Major tasks included creating new labor and management relations, promoting regular employment, encouraging working by stabilizing worker s livelihood, protecting and promoting women workforce, strengthening labor diplomacy and laying the foundation for advancing industrial safety. To be specific, plans for advancing the prevention of industrial accidents were made and implemented to raise the awareness in every sector of society and reduce the industrial accident rate to an advanced level after experiencing a number of accidents including the collapse of Seongsu Bridge and Sampoong Department Store, the gas explosion accidents in Ah-hyeon area, and subway construction site in Daegu in the mid 1990s. <Table 9>

19 <Table 9> Major tasks of labor policy ( ) Basic Goals Major Tasks 1) Spreading the culture of coexistence of labor and management 2) Preventing labor strikes and early resolution 3) Providing training on 1) Harmonizing industrial relations and wage negotiations 4) Providing housing support for workers 5) stabilizing income 2) Boosting the morale of Protecting Women workers 6) Special management for workplaces workers and preventing industrial accidents 3) vulnerable to industrial accident 7) Protecting workers injured by Pursuing proactive employment policy industrial accidents 8) Overhauling employment related acts 9) Expanding skilled workers 1) Promoting cooperative labor and management relations 2) Strengthening competitiveness of industrial workers 3) Boosting the morale of workers by stabilizing their livelihood 4) Preventing industrial accidents and protecting workers injured by industrial accidents 1) Reforming labor and management relations 2) Pursuing proactive Settling participatory and cooperative industrial employment policies 3) Improving welfare for workers 4) relations Establishing a 3 Year Plan for advancing industrial safety 5) Strengthening labor diplomacy 1) Creating new culture of labor and management relations 2) 1) Creating a new culture of industrial Pursuing proactive employment policies 3) Boosting the morale of relations 2) Establishing a system for industrial workers and providing livelihood support 4) Laying the foundation workforce development 3) Establishing for advancement of industrial safety 5) Protecting the female industrial competitiveness and enhancing workforce and promoting employment of women 6) Enhancing the international confidence status of labor diplomacy Ministry of Labor, White Paper on Labor, 1994, pp. 4-7; 1997, pp. 4-7; 1998, pp. 4-7; From 1998 to 2002 Run by President Kim Dae-jung, this period was called the government of the people. After the economic crisis that hit the nation in late 1997, the national agenda of this administration focused on overcoming the economic crisis under the IMF program Health and Welfare Policy The key of the health and welfare policy of the government of people was achieving "productive welfare." Productive Welfare is a proactive social policy aimed at protecting the basic livelihood of

20 vulnerable classes so that they can lead life with human dignity and self-esteem as well as break the vicious cycle of poverty by helping them stand on their own feet through expanding opportunities to participate in economic and social activities. Along with participatory democracy and market economy, achieving productive welfare the details of which were provided in the President s congratulatory remarks on Aug. 15th, 1999 was the major national agenda of the government of people to establish advanced society. (Ministry of Health and Welfare, White paper on Health and Welfare, 2000, p.11) Productive welfare is composed of three pillars; 1) first distribution by market force, 2) redistribution by state and 3) social investment by market and the state to help vulnerable classes stand on their own feet. The economic crisis in 1997 caused chronic high rates of unemployment, increasing employment uncertainty. Due to massive unemployment, the middle class collapsed, the population in poverty increased dramatically, and inequity in income distribution was aggravated. Against this backdrop, the government promoted the productive welfare policy to achieve social integration by enhancing the quality of social policy and reducing side effects of growth-first policy. (Ministry of Health and Welfare, White paper on Health and Welfare, 2000, p.13) Labor Policy A major goal of labor policy during this period( ) was stabilizing labor and management relations and drawing up proactive measures to tackle unemployment. Pursuing productive welfare started with the recognition that proper attention was not paid to welfare policy in the process of rapid economic growth. As the process of overcoming economic crisis caused massive unemployment and aggravated income inequity, the need for social reintegration increased and the need for pursuing welfare policy focusing on human development was also raised in order to prepare for the upcoming knowledge-based society. Against this backdrop, the government came up with the idea of productive welfare to expand the middle class and improve the livelihood of the middle and low-income classes. (Ministry of Labor, White Paper on Labor, 2000, pp.6-7) Major labor policies during this period included Promoting dialogue between labor and management, tackling unemployment, expanding employment insurance, developing workers capability, improving work conditions and labor welfare, preventing industrial accidents and protecting workers injured from industrial accident, promoting and securing female employment, and strengthening international cooperation. <Table 10>

21 <Table 10> Major tasks of labor policy ( ) Major goals and tasks of labor policy 1) Stabilizing labor and management relations 2) Establishing and facilitating comprehensive measures to 1998 tackle unemployment 3) Realizing labor administration that can be trusted 1) Creating a new industrial culture of stabilization of labor and management relations 2) Pursuing 1999 proactive measures to tackle unemployment 3) Expanding productive welfare 4) Improving welfare and benefits for workers 1) Promoting Tripartite dialogue 2) Enforcing measures to tackle unemployment 3) Expanding employment insurance 4) Developing worker s capability, 5) Improving working conditions and labor welfare, 6) Preventing industrial accidents and protecting workers injured from industrial accidents 7) Promoting and securing female employment 8) Strengthening international cooperation Ministry of Labor, White Paper on Labor, 1999, pp.4-5; 2000, pp.4-8; 2001; 2002; From 2003 to Present This period is the current administration of President Roh Moo-hyun s participatory government Health and Welfare Policy Health and welfare policy during this period is outlined in the 5 Year Plan for Participatory Welfare (2nd Long-term Plan for Social Security Development). The 5 Year Plan for Participatory Welfare( ) is a government-wide long-term comprehensive welfare policy established by private experts and the 5 related Ministries of Culture and Tourism, Information and Communication, Labor, Gender Equality and Family, and Construction and Transportation presided by Ministry of Health and Welfare and based on the Framework Act on Social Security. The plan aims to 1) strengthen the social safety net, of which the foundation was laid under the 1st Long-term Plan for Social Security Development, 2) establish a welfare infrastructure and expand welfare service in preparation for social and economic changes due to the low birth rate and population aging, 3) provide universal welfare service to all the citizens, and to 4) establish a participatory welfare community where quality life is realized by reducing relative poverty. (Ministry of Labor, White Paper on Labor, 2004, p.3) Participatory welfare is based on the idea of universal welfare, government s accountability, and people s participation, succeeding the previous government s productive welfare, while reflecting the changed reality of matured civil society and the increased need for welfare. In other words, participatory welfare aims to create a cycle in which welfare expansion leads to economic development and that leads

22 to welfare improvement, as opposed to the conflicting situation of welfare expansion and economic development. (Ministry of Labor, White Paper on Labor, 2004, pp.1-2) Labor Policy A major goal of labor policy in terms of labor and management relations of the participatory government that took office in February 2003 is to build labor management relations for social consolidation. To achieve this policy goal, Direction for Labor and Management Relations Reform was announced on Sep. 4th, 2003 with the 3 objectives of minimizing social cost stemming from labor and management conflicts, enhancing the stability and flexibility of the labor market, and narrowing the gap among working classes. In order to achieve these objectives, 9 major tasks including 1) establishing labor management relations practices that meet the global standards, 2) building partnerships based on trust and 3) settling labor and management relations that respect law and principle were introduced. (Ministry of Labor, White Paper on Labor, 2004, p.61) Labor policy in terms of the labor market focused on strengthening the role of employment insurance in the labor market, strengthening support for lifelong development of work capability, and laying the foundation for the promotion of female employment. In terms of labor standards, various forms of protective measures were introduced including efforts to enact the Irregular Employer Protection Act and to establish policies for irregular employees in the public sector, seeking balance between labor flexibility and abuse prevention under the principle of eliminating discrimination against irregular employees. In terms of prevention of industrial accidents and protection of workers injured from industrial accidents, efforts were made to enhance safety management's ability by promoting autonomous safety management in large workplaces and improving working conditions and facilities, and providing safety and health related technical support in small workplaces. (Ministry of Labor, White Paper on Labor, 2004, p.68) In addition, various activities were launched to enhance the national status in the field of international labor cooperation.

23 4. Policy Proposal Activities by Trade Unions This study reviewed policy proposal and petition activities by labor unions on the enactment and amendment of related acts in the areas of social insurance, welfare for employees, and prevention of industrial relations focusing on Federation of Korean Trade Unions(FKTU) and Korean Confederation of Trade Unions(KCTU) Federation of Korean Trade Unions From 1981 to 1987 During this period, FKTU s legislative policy proposal activities focused on the amendment to the Integrated Labor Relations Act, the protection of employees, and improvement of labor welfare. FKTU proposed to enact the Industrial Safety and Health Act in 1981 and Special Act on the Prevention of Pneumoconiosis for Mining Workers and Protection of Mining Workers Suffering from Pneumoconiosis in It also proposed to improve the Seafarers Act that failed to meet the labor standard and to introduce the Employment Insurance System. In addition, the FKTU urged enforcing a minimum wage system, made a proposal on the Amendment to Framework Act on Vocational Training, proposed to enact the Special Act on Wage Guarantee to prevent possible pay delay due to bankruptcy, closure, and financial difficulties of businesses in 1985, made a proposal on the National Welfare Pension Act and government s amendment, made a policy proposal on the introduction of a National Pension System, pointed out problems that arose from unifying medical insurance for universal health care, and proposed to amend the Medical Care Act in (FKTU, 50 Year History of Federation of Korean Trade Unions, 2002, p.686) From 1988 to 1991 During this period, FKTU filed petitions to the National Assembly for the amendment to the State Public Officials Act, Income Tax Act and Labor Relations Act in The Labor Relations Act included