Discussions on the four-day workweek are steadily taking place along with policies such as the 52-hour workweek and the extension of the retirement age of 65. With the spread of COVID-19, discussions on the introduction of a four-day workweek have become more prominent. However, the introduction of the four-day workweek in Korean society is premature. The introduction of a four-day workweek in Korea's current working environment may not work properly and may only lead to wage cuts or intensify inequality between industries. Furthermore, there is a possibility that the introduction of the four-day workweek will weaken the nation’s industrial competitiveness. Considering the various problems that may arise when the four-day workweek is introduced, we should recognize that the introduction of the four-day workweek is premature.
First, the four-day workweek can only lead to wage cuts. The government's regulations on working hours are gradually strengthening. Since July 2021, the 52-hour workweek system has been implemented reducing the legal weekly working hours from 68 hours to 52 hours. As working hours were shortened, Small and medium-sized enterprises (SME) needed additional manpower. They insisted on a 52-hour workweek suspension due to difficulties of labor shortage and the cost burden of securing additional manpower. Where the burden on companies increased and resistance has occurred in the application of the 52-hour workweek, introducing a four-day workweek additionally is impractical. If it is introduced, the burden of labor costs for many companies can increase. This is because while the amount of work remains unchanged, working hours are reduced, so additional manpower becomes necessary. Accordingly, companies can reduce workers' wages or increase the number of non-regular workers. Park Cheol-sung, a professor at the College of Economics & Finance, Hanyang University, said, "If the four-day workweek is introduced, many companies’ labor costs will inevitably increase. […] Lowering wages may provide affordability, but four-day workweek may burden the management community with new hiring itself and increase non-regular workers.” In fact, according to Seoul Economic Daily, staff from SMEs, who inevitably worked four days a week due to COVID-19, said, "Only our wages reduced, but the amount of work is similar," adding that most of them are responding by temporary annual paid holiday reduction and wage cuts. Meanwhile, real wages can be significantly reduced in the case of workers whose wages are compensated by overtime. In particular, in production industries, low-skilled and low-wage workers are compensated for their wages by overtime due to their low basic salary. However, if the four-day workweek is introduced, legal working hours will be shortened while overtime work would only be allowed to a limit of 12 hours per week under the Labor Standards Act, so real wages will inevitably decrease.
Second, inequality between industries can intensify due to the four-day workweek. The introduction of a four-day workweek automatically reduces working hours. However, the problem is that the effect of reducing working hours differs for workers depending on the type of industry and employment. Most of the people who can benefit from the reduction of legal working hours to 32 hours by introducing a four-day workweek are regular workers in large companies in the public sector. In the case of large corporations in the public sector, manpower and finance, which become the infrastructure, are stably established. In addition, the conditions of a high labor union organization rate and monthly wage system allow the loss of basic salary to be minimized even if working hours are shortened. On the other hand, SMEs and subcontractors can directly suffer wage losses, as mentioned earlier, rather than benefit from shorter working hours. This is, because unlike large companies, SMEs and subcontractors show low union organization rates, and the daily wage system and hourly wage system are more common than being paid a salary. Moreover, in the case of SMEs, there is a prediction that it will be virtually impossible to introduce a four-day workweek because there are clear differences in the environment and capacity within each organization. In the daily or special employment sectors, it is difficult to even apply the four-day workweek at all. Eventually, the gap in working hours between large companies and SMEs will lead to a gap in hourly wages, and furthermore, the gap in income levels will increase. Therefore, the gap in the overall income level can increase significantly. As inequality arises in which some rest and others work, the polarization of labor and rest can also intensify.
Third, the four-day workweek can weaken the national industrial competitiveness. According to the Korea Economic Research Institute on September 8th, 2021, the labor productivity of SMEs compared to large companies in Korea is 28.7%, far below the OECD member countries’ average of 64.8%. The flexibility ranking of dismissal regulation for workers on regular contracts is only 20th out of 37 OECD member countries. In addition, according to Statistics Korea, Korea will become a “super-aged society” from 2026, and anyone can easily predict that an aging population will reduce labor productivity. In such a situation where labor productivity is low and the labor market is not flexible, the introduction of the four-day workweek can further reduce labor productivity. In fact, Kim Yong-chun, head of the employment policy team at the Korea Economic Research Institute, said, "Compared to other developed countries, Korea's labor productivity is not high, and the labor market is not flexible. […] If this is not resolved first and the four-day workweek spreads throughout the industry, the competitiveness of the national industry itself could fall.” Meanwhile, the introduction of the four-day workweek can be seen as a uniform compulsion of working hours. It is no different from the state blocking people from doing more work and receiving more wages. However, for the jobs that require creativity, such as computer software developers and designers, the quality of time rather than quantity is more important. When creative thoughts come up and they can best immerse themselves in their work, they work all night. On the contrary, if they can't think of anything, they don't work. If working hours are uniformly shortened even in these occupations, industry and national competitiveness in these fields may decrease. This is because creativity is not a thing that can be exercised by uniformly shortening working hours.
Many problems can arise if the four-day workweek is introduced. As workers' interest in working hours and working environment continues, it obviously needs to be discussed. However, the introduction of the four-day workweek in Korea is premature. With other labor-related policies increasing the burden on companies and gaps between large companies and SMEs, the introduction of a four-day workweek can only lead to wage cuts and intensification of inequality between industries. Furthermore, considering Korea's low labor productivity and flexibility, national industrial competitiveness may decrease. In fact, in February 2021, Shin Se-don, a professor of the Division of Economics at Sookmyung Women's University, pointed out, "Only a few companies can adopt such an ideal system. It's too early now." Considering various problems that can arise, the four-day workweek should not be introduced.
Regarding the four-day workweek, proponents claimed that it can improve corporate labor productivity and can be the solution to climate change and unemployment problems. On the other hand, opponents claimed that it could lead to wage cuts, intensification of inequality between industries, and reduction of national industrial competitiveness. Through the assertions of both sides, we were able to look at both the positive effects that Korea could have if it introduced the four-day workweek and the negative consequences that could occur in contrast. Currently, our society is paying a lot of attention to building a better working environment by discussing various policies related to labor, such as the 52-hour workweek and the extension of the retirement age. Therefore, the government should take a closer look at each position and make the best choice whether the introduction of the four-day workweek is necessary or unnecessary, and if necessary, when to introduce it. As labor is an inseparable part of our lives, CAH hopes readers think about whether the introduction of the four-day workweek will benefit Korean society or rather do harm.