- In late 1997, Korea faced a national insolvency crisis, which led to a bail-out from the IMF and sharp economic slump. (price increase rate : 4.4% in 1997 → 7.5% in 1998, unemployment rate : 3.0% in 1997 → 5.9% in 1998, economic growth rate : 4.7% in 1997 → -6.7% in 1998)
- Following the financial crisis, the government tried to boost the economy in artificial ways by encouraging the setting up of venture capital companies and issuance of credit cards. However, they caused some side effects, such as generating four million people, almost 10% of the population, who defaulted on credit card debt, and destroying the middle-class economy.
○ After the financial crisis, the government strengthened its policies to protect workers’ rights and interests. Thanks to this, the coverage of social insurance was expanded, resulting in an explosive increase in eligible beneficiaries and related administrative demands.
- In 1999, industrial accident compensation insurance and/or unemployment insurance were extended to all workplaces, resulting in a great increase in the number of workers and workplaces covered by both insurances. (No. of workplaces covered : 400,000 in 1998 → 601,394 in 1999, No. of workers covered : 5,268,000 in 1998 → 6,054,000 in 1999)
- The Ministry of Labor, the Ministry in charge, newly employed 835 persons in 2006 and another 125 persons in 2007. This was a huge increase from approximately 2,800 at the beginning of 2006. The newly employed personnel, accounting for 40% of the total, were assigned to field offices.
○ The increase in the number of new employees led to lack of expertise and lower job adaptability among employees.
- As the application of the Labor Standards Act was extended to workplaces with less than five workers in 1999, complaints about overdue wages sharply increased especially among small enterprises, which led to a delay in handling complaints and growing discontent among service users. The heavy workloads, thus, undermined the morale of employees. In addition, field offices suffered from a lack of employees with proper expertise.
- All this raised the need to standardize work processes and provide job-related professional training in real time so that new employees can adapt themselves to work and master their work in a short period of time.
○ Rapid industrialization entailed numerous and diverse industrial accidents. To meet the growing demands for accident prevention, administrative services were expanded.
- Professional knowledge of technical matters in each sector is needed to prevent industrial accidents effectively. However, in 2006, 80.4% of occupational safety & health inspectors of the Ministry of Labor, in charge of preventing industrial accidents, were either newly employed ones or administrative workforces with no technical skills. They lacked the knowledge of complicated laws and regulations, as well as the ability to apply their administrative duties to each workplace.
- Since occupational safety & health administration was focused on taking a one-off remedial measure after an industrial accident occurred, it had a limited effect on accident prevention and the reliability was low.
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