The Roles and Tasks of Labor Unions for Workers' Vocational Education and Training 1
3. Vocational Education and Training and the Current Status of Trade Unions
manufacturing sector, indicating trade unions and the amount of training had positive effects in the service industry. In contrast, Lee Byung-hee•Kim Dong-bae (2003) and Lee Young-myeon•Na In- kang (2006) found that unions had meaningful positive effects on training, but if there was more control, statistical significance disappeared. No Young-jin (2007), using Workplace Panel Survey, found that the negative effects of trade unions on training, but favorable labor-management relations had a positive effect on training. Na, In-kang (2011) used Human Capital Corporate Panel to show a similar result. Lee Young-myeon•Na In-kang (2012) used Human Capital Corporate Panel to indicate that there was no supporting evidence of the impact of unions on training.
In Korea, it is shown that trade unions have no effects on training or have negative ones. However, further studies are needed based on the above-mentioned theoretical discussion. In other words, the effects of unions on training may directly influence training due to higher wages or request for training by trade unions, but they indirectly influence enterprise-sponsored training through the effects of compressed wages or of the prevention of changing jobs. In that regard, Kim, Ahn-kook (2001, pp. 76-77) conducted regression analysis by including variables such as the union dummy and wage compression, indicated that wage compression had a significant influence on training but the union dummy had no effect on training. Although the study has limitations, it is shown that trade unions may indirectly influence training by means of wage compress or measures of the prevention of changing jobs. Accordingly, this can suggest the effect of trade unions on training is required to assume structural model. The next chapter 4 will explore the impact of trade unions on training through structural model.
Figure 1. Businesses with employment insurance and businesses with support for vocational education and training project (2008~2013)
Source: Employment and labor white paper, each year.
From the workers’ perspective, the number of the insured of employment insurance steadily increased annually, approaching 12 million people as of 2013. The number of beneficiaries of vocational education and training project under employment insurance (the number cases) reached its peak in 2009, and it decreased and remained stationary in 2011. In 2013, the number was 3.6 million cases. The number of beneficiaries of vocational education and training project under employment insurance (man-year) was only 3.6 million. Considering that the proportion of businesses receiving support for vocational education and training project was less than 10%, it can be assumed that the proportion of beneficiaries among the insured is the same level.
Figure 2. The number of the insured of employment insurance and the number of beneficiaries of vocational education and training project (2008~2013)
Source: Employment and labor white paper, each year.
If incumbent workers’ training of vocational education and training project under employment insurance is regarded as the number of people with training, it has steadily increased since 2000 and reached its peak of 5 million persons in 2009. By 2011, the number reduced. It was about 3.6 million persons in 2013, showing that it remained flat. Overall, finances executed for incumbent workers’ training are on the rise, but they showed a decline between 2002 and 2004 and reached their peaks in 2009. They declined until 2012 and rebounded in 2013. As of 2013, the amount of finances executed was approximately KRW 640 billion. Vocational education and training project under employment insurance provided about KRW 180,000 to an incumbent worker.
Figure 3. The number of incumbent workers’ training of vocational education and training project under employment insurance and the amount of finances executed (2000~2013)
(Unit: 1,000 persons, 100 million KRW )
Source : The current status of vocational education and training project, each year.
According to Human Capital Corporate Panel Survey, the money that businesses spent on training per person was KRW 420,000 on average in 2007, KRW 487,000 in 2009, and KRW 381,000 in 2011, showing that it is similar to the amount of finances executed for incumbent workers’ training of the vocational education and training project under employment insurance. Table 1 indicates corporate employment insurance premium, the expenditure on education and training, and the amount of refund (Elementary analysis report on Human Capital Corporate Panel Survey, each year). Among employment insurance premium, the proportion of refund of vocational education and training project under employment insurance is similar to the trends as shown in the previous figure, compared with the amount of payments of employment stability•vocational education and training project.
Among the expenditure on education and training, the proportion of employment insurance refunds was only about 15~30 %. This means that incumbent workers’ vocational education and training project under employment insurance led by the government does not comprise a share of businesses-led incumbent workers’ training.
Table 1. The current status of corporate employment insurance premium and the expenditure on education and training
(Unit: 1 million KRW, %)
Total Year 2005 2007 2009 2011
Payments for employment stability vocational education and training project among employment insurance premium(A)
Average 224 276 473 300
N 428 456 440 449
Refunds of vocational education and training project under employment insurance(B)
Average 93 155 97 85
N 422 444 404 418
Total personnel cost (C) Average 42,181 46,195 48,778 51,056
N 448 464 456 488
Total education and training expenditures (D)
Average 578 648 712 597
N 436 461 458 484
Employment insurance refund rate
=100*(B/A)
Average 24.5 27.3 33.4 25.4
N 416 440 385 403
The proportion of education and training expenditures
=100*(D/C)
Average 1.0 1.2 1.3 0.8
N 435 460 450 476
The proportion of funds of education and training expenditures
= 100*(B/D)
Average 14.7 31.0 29.5 22.1
N 407 440 392 413
Source: Human capital corporate panel survey, each year.
Comparing education and training expenditures spent by businesses with labor costs, the proportion of education and training expenditures was 1% in 2005, 1.2% in 2007, 1.3% in 2009, and 0.8%
in 2011, representing only 1% compared with labor costs. However, it should be noted that the Human Capital Corporate Panel Survey conducted a survey of more than medium-sized businesses.
To make a comparison with OECD countries, this shows the proportion of the expenditures for the active labor market policy compared with GDP, not with labor costs. The proportion is the OECD average of 0.56%, but in Korea, it is only 0.28%, a half of the average. In Sweden, the proportion is 1.22%, the highest level. In addition, in France and Germany, it is more than 0.8%, indicating that they spend more money on education and training expenditures. The United States is the only country that spends less money on the active labor market policy than Korea.
Payments for employment stability vocational education and training project among employment insurance premium(A)
Employment insurance refund rate
=100*(B/A)
Figure 4. The proportion of expenditures for the active labor market policy compared with GDP (2011)
(Unit: %)
Source: OECD Employment Outlook (2013)
The large share of incumbent workers’ training supported by the vocational education and training project under employment insurance is employer-sponsored vocational education and training, a part of training organized by the employer. Employer-sponsored vocational education and training accounts for more than 90% of the total incumbent workers’ competency development project in terms of the number of trained person. And it represents over 73% in terms of the amount of finances executed. Besides, paid training leave, the support fund for workers’ vocational competency promotion, and Training Account System for Incumbent Workers, which are led by employees, are only 7% in terms of the amount of person. The systems provide only 13% in terms of the amount of finances executed. Therefore, needless to say, incumbent workers’ vocational education and training project in terms of vocational education and training project under employment insurance is mainly led by the employer.
Table 2. The current status of incumbent workers’ vocational education and training project among vocational education and training project under employment insurance (2013)
(Unit: 1,000 persons, 100 million KRW, %)
Person Rate (%) The amount of finances
executed
Rate (%)
Total training for incumbent workers 3,616 100 6,385 100
Employer-sponsored vocational education and training
(including national human resource development consortium) 3,284 90.8 4,675 73.2
Paid training leave 10 0.3 95 1.5
Support fund for workers' vocational competency promotion 212 5.9 542 8.5
Training account system for incumbent workers 51 1.4 180 2.8
Providing support for core vocational competency for medium and
small-sized enterprises 43 1.2 206 3.2
Loans for educational expenses 16 0.4 624 9.8
Loans for facilities equipment 63 1.0
Source : The status of vocational education and training project, 2013
Notwithstanding, incumbent workers’ vocational education and training project was small compared to other OECD countries, and employers provide poor support to their workers. Table 3 shows the survey on education and training for the past year of those who were employed and received education and training during the past year among workers in Korea, Japan, the United States, the United Kingdom, Germany, and Sweden from the Programme for the International Assessment of Adult Competencies (PIAAC). Among six countries, Korea had the completion rate of distance learning courses of 59%, the highest level, and had lower level than the United States and the United Kingdom in terms of the participation of on-the-job training. Korea ranked the lowest in the participation of seminars/workshops except Sweden. Furthermore, as for vocational education and training project supported by the employer, Korea ranked the lowest of 49%, which indicated that the employer provided support of less than 12% compared to Germany and the United Kingdom.
Table 3. The completion of incumbent workers’ education and training and the availability of the provision of support by the employer
Country Item
Availability of open education/distance learning during the past one year
Availability of OJT during the past one year
Availability of seminar/
workshop during the past one year
Sponsored by the employer (partial/
whole)
Yes N/A Yes N/A Yes N/A
Germany
Sample size 102 601 343 359 493 209 411
Number of population 898,947 5,625,552 3,190,007 3,324,071 4,549,353 1,964,725 3,974,112
Percentage 13.8 86.2 49.0 51.0 69.8 30.2 61.0
Japan
Sample size 183 532 305 410 486 229 387
Number of population 2,693,478 7,695,582 4,467,777 5,921,284 6,995,436 3,393,624 5,771,010
Percentage 25.9 74.1 43.0 57.0 67.3 32.7 55.7
Korea
Sample size 536 382 466 451 609 309 451
Number of population 2,836,487 1,972,600 2,389,676 2,412,004 3,217,933 1,591,154 2,359,185
Percentage 59.0 41.0 49.8 50.2 66.9 33.1 49.1
Sweden
Sample size 392 890 493 788 876 407 768
Number of population 475,699 1,118,743 612,157 981,365 1,060,995 534,782 947,167
Percentage 29.8 70.2 38.4 61.6 66.5 33.5 60
United Kingdom
Sample size 235 973 718 491 958 251 736
Number of population 979,767 4,021,976 2,815,549 2,193,719 3,987,063 1,022,204 3,090,019
Percentage 19.6 80.4 56.2 43.8 79.6 20.4 61.7
United States
Sample size 335 527 506 357 642 221 441
Number of population 13,069,533 20,775,320 20,030,545 13,848,288 25,119,912 8,758,922 17,178,913
Percentage 38.6 61.4 59.1 40.9 74.1 25.9 50.8
Source: Programme for the International Assessment of Adult Competencies (PIAAC) 2013
2) Trade unions
Since the 1980s, the union membership rate in Korea has been a downward trend. After pro- democracy movements in 1986, the rate rebounded temporarily. In 1989, one year after when workers mounted fierce struggles in 1988, it was almost 20%. Since then, the rate has declined continuously. In 2010, it recorded the lowest level of 9.8%.
Figure 5. Trends in the union membership in Korea (1951~2010)
(Unit: %)
Source: KOSIS The status of national labor union organization
Admittedly, the union membership rate steadily declines across the world. Except France, Korea has the lowest level of the union membership among OECE countries. In Taiwan, the union membership rate increased, and then it decreased. However, it has the highest level of union membership rate by 2005 for which data was available. In the United Kingdom, union membership peaked in the early 1980s, but sharply declined in the 1980s. After the 1990s, it steadily declined.
However, the country had the highest union membership rate in 2010 according to the data available. In Japan and the United States, union membership is steadily on the decline. Japan has about 10% higher membership than Korea.
Figure 6. The union membership rate by country (1981~2010)
(Unit:%)
Source: KOSIS The status of national labor union organization
In Korea, the number of trade unions is generally on the decline. In the early 2000s, the number increased for a while, and then declined. As of 2011, the number inched up to 5,120. However, the number of union members dropped. After the Asian financial crisis in 1998, the number rebounded and steadily edged up. As of 2011, the number of union members was 1.72 million. While the number of trade unions declined, the number of union members increased. This means that since the 2000s, Korea has seen organized unions led by large enterprises in its economy.
Figure 7. The number of trade unions and the number of union members in Korea (1994~2011)
Source : KOSIS The status of national labor union organization
In light of the type of organization, trade unions in Korea are mostly composed of enterprise-level trade unions. As of 2010, enterprise-based unions represented 92.2% of the total unions. Non- enterprise level trade unions, which are not organized at the enterprise level, are about 5.5%. Trade unions that are classified as unclear categories are 2.3%. Non-enterprise level trade unions include industrial unions, representing approximately 24.3% (59 unions). Industrial unions account for just 1.3% of the total unions.
Figure 8. The status of trade unions by the type of organization (the number of trade unions)
Source : KOSIS The status of national labor union organization
Considering the number of union members, the percentage of workers belonging to enterprise- based unions and industrial unions is 46% and 45%, respectively, with the same size. The percentage of workers belonging to unclassified unions is as much as 9%.
Figure 9. The status of trade unions by the type of organization (the number of union members)
Source : KOSIS The status of national labor union organization
3) The intervention of labor unions in workers’ vocational education and training
As of 2011, 44% of companies discussed the implementation of vocational education and training project with trade unions or labor representatives. In 2005, many companies were in consultation with trade unions or labor representatives, while in 2009, fewer companies conducted consultation on the implementation of the project. In 2009, companies had the largest spending on training. And they had the largest number of incumbent workers’ vocational education and training project under employment insurance, as well as the amount executed on training expenditures. When classifying the manufacturing sector and the service industry, services have far more consultation with trade unions or labor representatives than manufacturing industries do in terms of the implementation of the project. By size, large firms with over 300 employees have more consultation with trade unions or labor representatives than small and medium-sized companies do on the implementing of the project.
Table 4. The consulting proportion of companies with trade unions or labor representatives in vocational education and training project (2005~2011)
Year 2005 2007 2009 2011
Total Frequency 12,715 12,765 11,734 13,175
Percentage 49.4 44.2 38.7 44.1
By industry
Manufacturing Frequency 5,766 6,572 5,885 6,418
Percentage 42.0 42.2 37.4 41.2
Services Frequency 6,948 6,192 5,849 6,757
Percentage 57.8 46.4 40.1 47.4
By size
Less than 300 employees
Frequency 11,711 11,402 10,453 11,624
Percentage 48.5 43.6 37.7 42.9
More than 300 employees
Frequency 1,004 1,363 1,281 1,552
Percentage 61.5 50.1 48.5 56.0
Source: Workplace Panel Survey, each year
In most cases, trade unions generally support employers’ vocational education and training. It is noticeable that in some cases, they suggest an alternative while actively participating in the development, showing some changes with year from 35% to 49%, but more than one-third of them actively take part in the program. Mostly, trade unions are passive about the participation in employer-based vocational education and training or they sometimes dismiss it, representing about 39%-58%. About 4%-8% of trade unions remain utterly indifferent about the program. In rare cases, there are less than about 3% of unions who passively or actively disapprove.
Table 5. The attitude of trade unions toward employers’ vocational education and training
Year 2007 2009 2011
Systematically /actively oppose
Frequency 63 5 11
Percentage 1.4 0.1 0.1
Passively oppose Frequency 113 364 322
Percentage 2.6 3.2 2.7
Passively oppose /acquiesce
Frequency 1,695 6,546 5,984
Percentage 38.8 57.6 49.6
Actively support /suggest an alternative
Frequency 2,134 3,978 4,881
Percentage 48.9 35.0 40.5
Show indifference Frequency 362 475 861
Percentage 8.3 4.2 7.1
Source: Workplace Panel Survey, each year
Vocational education and training project for incumbent workers enables businesses to improve productivity, and allows workers to develop skills and get job security: this is helpful for both sides. Accordingly, the implementation of vocational education and training project possibly leads to the improvement of labor-management relations. In a survey on the degree of contribution of the 2012 vocational education and training project to the establishment of favorable labor-management relations, 14.1% of companies responded that the project made a significant contribution to improving good labor management relations. About 39% of respondents said that the project made a modest contribution to amicable relations between labor and management. The survey found that more than half of companies considered the project to contribute to friendly labor management relationships. About a mere of 6.4% of respondents said that the project did not make for positive relations between labor and management.
By size, as many as 29% of large companies with more than 1,000 employees, in particular, said that the project made a great contribution to the relations. In contrast, as few as 10.7% of companies with 100 to 299 employees said that the project made for the relations. By the type of industry, as many as 27.2% of health care and social welfare services said it had a positive impact on the relations, followed by 22.2% of financial and insurance business. As few as 10.2% of arts•sports, leisure related services responded that enterprise-based project made for positive relations between labor and management, followed by specialty•science and technical services (10.3%) and wholesale and retail sales (10.7%). As many as 11.2% of electrical engineering•gas•steam and waterworks and 8.7% of manufacturing industries said that the project made little contribution to good labor-management relations.
Table 6. The contribution of vocational education and training project to favorable labor- management relations
Significant contribution Minor contribution Modest contribution Very little contribution Not contribution Frequency Percentage Frequency Percentage Frequency Percentage Frequency Percentage Frequency Percentage
Total 66,626 9,413 14.1 26,203 39.3 26,694 40.1 3,889 5.8 426 0.6
Size
10- 29 employees 42,988 6,492 15.1 16,243 37.8 17,382 40.4 2,693 6.3 177 0.4
30- 99 16,642 2,032 12.2 7,012 42.1 6,546 39.3 850 5.1 203 1.2
100-299 5,128 549 10.7 2,246 43.8 2,057 40.1 236 4.6 40 0.8
300-499 800 104 13.0 282 35.2 351 43.9 60 7.5 3 0.4
500-999 598 100 16.7 243 40.6 215 35.9 37 6.2 3 0.5
Over 1000 470 137 29.1 178 37.8 143 30.5 12 2.6 0 0.0
Significant contribution Minor contribution Modest contribution Very little contribution Not contribution Frequency Percentage Frequency Percentage Frequency Percentage Frequency Percentage Frequency Percentage
Industry
Mining 113 18 15.7 44 38.6 52 45.7 0 0.0 0 0.0
Manufacturing 24,585 2,933 11.9 8,748 35.6 10,699 43.5 2,129 8.7 76 0.3
Electrical engineering, Gas, Power mechanical engineering and waterworks
87 15 16.9 41 46.4 22 25.5 10 11.2 0 0.0
Sewage, Waste treatment, Raw materials recycling and environmental remediation industry
775 149 19.2 277 35.8 301 38.8 42 5.4 7 0.9
Construction industry 4,967 642 12.9 2,366 47.6 1,849 37.2 60 1.2 50 1.0
Wholesale and retail
sales 7,160 763 10.7 3,160 44.1 2,748 38.4 365 5.1 124 1.7
Transportation business 3,980 613 15.4 1,757 44.1 1,408 35.4 176 4.4 27 0.7
Lodging and restaurant
business 1,599 286 17.9 614 38.4 620 38.8 79 4.9 0 0.0
Publishing, film, broadcasting communication and information service industry
3,287 426 13.0 1,300 39.6 1,344 40.9 196 6.0 21 0.6
Finance and insurance
business 933 207 22.2 317 34.0 373 40.0 12 1.3 23 2.4
Real estate and leasing
service 798 140 17.6 260 32.6 343 43.0 55 6.9 0 0.0
Specialty, science and
technical service 3,831 395 10.3 1,704 44.5 1,675 43.7 58 1.5 0 0.0
Project facility management and project
support service 3,031 380 12.5 1,005 33.2 1,390 45.9 232 7.6 24 0.8
Education service 2,079 266 12.8 868 41.8 827 39.8 92 4.4 25 1.2
Health care and social
welfare service 6,205 1,689 27.2 2,539 40.9 1,745 28.1 232 3.7 0 0.0
Arts, sports and leisure
related service 504 52 10.2 251 49.8 188 37.3 10 2.0 3 0.6
Association and organization, repair
business 2,693 440 16.4 953 35.4 1,112 41.3 140 5.2 46 1.7
Source: The actual condition of corporate training (2013)
However, many companies adopt neither positive nor negative attitudes toward the impact of vocational education and training project on favorable labor-management relations because workers and trade unions still do not feel the need for vocational education and training project.
Companies consider that the project does not have a positive impact: this is closely linked to the reality. A survey of companies on the accomplishment of incumbent workers’ vocational education and training project found that the improvement of workers’ motivation ranked first, followed by the improvement of job skills and higher labor productivity. The impact of the preventing of changing, driven by the provision of training ranked the lowest, compared to other accomplishments.
Figure 10. Accomplishments of incumbent workers’ education and training (4-point scale)
Source: Human capital corporate panel survey 2012 elementary analysis report p. 181