Graph 2 Analysis results of structural equation (factor out skill, factor out employment security)
Note: Education and training= education and training expenses per one person.
Graph 3 Analysis results of structural equation (factor in skill, factor out employment security)
Note: Education and training= education and training expenses per one person.
Participation of labor unions in skills development is gradually decreasing, even though their roles could be enlarged as a bearer of accumulated skills in a situation where significance of employee’s skills development is rising in the knowledge-based information society. In both coordinated market economies with developed social corporatism and liberal market economies, the participation of labor unions in skills development is declining while the vocational education and training is becoming individualized. Meanwhile, employment is becoming unstable throughout the world and the degree of changes in types of employment and labor market environment is increasing.
Overall, the unionization rates are decreasing with the declining manufacturing industries, and the role of labor unions is decreasing. Hence, the labor union’s role in regard to skills development is now facing considerable challenges and the measures taken in response to the issue differ among countries. The most noticeable difference is found between the countries with coordinated market economies and those with liberal market economies.
The circumstances of labor unions are better in the countries with coordinated market economy where social consensus and relatively more regulations on labor market or skills development are made. The intervention of labor unions in training system is much easier in countries where the categories and standards of trainings are elaborately defined with organizations that negotiate with the government policies related to the workers’ training. Labor unions are striving for overcoming various challenges they face in those countries.
German labor unions, which played significant roles in establishing the German qualifications framework that integrated 8 levels of education and occupational qualifications, are concerned about the weakening of social integration. Labor unions are executing the task of linking formal and non-formal training while the social consensus has been weakening with the increasing social conflict.
In contrast, it is getting harder for labor unions to intervene in training issues in the countries with liberal market economies. In the countries that rely on market mechanism, the patterns of labor union’s intervening in training system are being diversified and subdivided. Employers are being stingier with their investment on employees’ skills development and the governments are leaving the investment on skills development to private sectors. In Australia, unlike the traditional skilled labor unions, growing labor unions that mainly consist of professional employees have less interest in training. Ever since the regulations have eased, companies tend to hire trained workers rather than providing training. In Japan, after the collapse of the bubble economy, the role of major companies in skills development has weakened while that of government has grown stronger. Furthermore, the unionization rate for part-time employee is increasing with the growing participation of labor union in skills development. Also, the groundwork of labor union’s participation is laid with the reformation that requires employees to be liable for expenses incurred by VET projects. Nevertheless, systematic participation of labor unions in skills development has not yet established.
The situation in Korea, where labor unions show no concerns or participation in the workers’ skills development, is an extreme example of liberal market economy. Both employers and labor unions are lacking in interests for skills development due to the strongly combined low skill (automation) – high wage combination between employers and labor unions. This low skill – high wage combination caused businesses to move their production line to countries with cheaper labor which led to reduction in domestic employment while the labor unions are adhering to myopic policy that pursues their own interests as much as possible. Such a combination must be changed since it would result in weakening the competitiveness of Korean companies.
The labor unions in Korea that have been excluding non-regular workers and its enterprise-based structure make the worst situation for their participation in skills development. In such situations, some proposals were made such as having labor unions or employers' association in charge of evaluation of VET projects from employment insurance, and elevating the Tripartite Commission for Social and Economic Affairs to the status of an administrative commission for executing the agreements. Moreover, labor union’s participation is also extremely urgent and important in issues such as reduction of working hours, peak wage system, and reformation of pay system towards competency based one. Along with skills development, these issues will be the key factors for determining future recession or boom of labor unions.
on various socio-economic influences of labor unions. KRIVET’s 17th anniversary seminar is considered to be an opportunity for further in-depth discussions and studies on the influence of labor union on socioeconomic issues such as skills development, productivity, and employment.