The Korean labor movement carries an important responsibility on its shoulder at a critical stage in the country's economic development. It plays a useful and indispensable role in the democratic process in Korea by protecting the rights and interests of the workers. However it takes the risk of eroding Korean industrial competitiveness every time it demands salary increases way above the productivity gains achieved by Korean companies. It also hinders economic progress and increases the risk of a new recession when it officially demands a "halt to restructuring" at a time when so many Korean companies remain in a precarious situation, still showing weak balance sheets, high debt levels and low profitability. It is really a serious question whether Korean labor is serving the long-term interest of the Korean workers when it refuses to acknowledge the profound mutations in KoreaÆs growing economy. After all, every advanced country had to massively restructure its traditional economic sectors to remain competitive in the past 25 years: Steel in France, coal mining in the United Kingdom, chemicals in Germany and Automotive or shipbuilding in every Western country. Why would Korea be immune to this kind of necessity?

As the Korean economic landscape is rapidly changing, the Korean labor movement also needs to become more flexible. It must shift its focus from violent conflicts to rational negotiations and from refusing necessary changes to facilitating those changes. The evolution of labor relations in Western European countries is very revealing in this respect. Germany, England and France were all characterized by strong, inflexible and confrontational labor movements until the late seventies. Labor conflicts were frequent and management and government felt hostage. As traditional economic sectors underwent restructuring, unions all started losing influence and members started to defect as violent strikes failed to provide the answers to the workersÆ new challenges.

European Labor unions were only able to regain their lost appeal by adopting a radically new positioning freed from ideology and violence and built on flexibility and dialog.

This trend started in England when the Thatcher government held firm against a massive coal minersÆ strike in the late seventies. The countryÆs largest union, the Transport and General Workers had to define an entirely new strategy by listening to its membersÆ new concerns, refocus its programs on a limited number of realistic and practical objectives. Unions started to show increasing openness by selectively accepting no strike agreements and flexible work rules in exchange for better benefits and retraining programs for the workers. Foreign investors were particularly attracted by this new climate and today, more than 40% of Korean companiesÆ investments in Europe goes to England.

A similar transformation has started to occur more recently in Germany, a large economy which struggled increasingly to attract foreign investors because of high labor costs and inflexible labor regulations. German labor organizations lost 3.4 million members since 1991 and IG Metall, the largest German Union lost one third of its members. Workers started to defect as they blamed the unions for unemployment and sluggish growth. Businesses started to pull out of industry associations and independently cut deals with smaller unions. In response, IG Metall had to totally revisit its approach and offered its members a wide range of reform topics ranging from flexible pay scales, differentiated work weeks for different industries and even "opt-out" closes for companies which could not afford union demands. German Unions realized that different branches of the economy have different needs and started to design more realistic solutions.

Even in France, a country characterized by its very ideological and militant labor movement, the situation has evolved a great deal in the past 20 years. All unions lost members throughout the eighties and were only able to stop the erosion through drastic repositioning in the early nineties. A typical example of this new mindset is Nicole Notat, the female head of CFDT, FranceÆs second largest Union. In a bestûselling book published in 1997 she expresses her conception of labor action: "I disagree with the militants who believe that all labor conflicts are inherently positive. Some conflicts are progressive, other can be conservative or even regressive". She justifies her unionÆs strategic shift by saying "We believe that it is time to seek constructive dialog with management and that negotiation can be much more productive and effective than war-like action". She also expresses unconventional views on globalization: "globalization is neither good nor evil but it is an unavoidable fact and an opportunity for France. The fantasy of a protectionist economic system, self sufficient for production and consumption should be stored in an antique museum, once and for all" This new mindset took a concrete form when France implemented its "work time reduction" law in 1998. For the first time, management and labor met all over the country to discuss how to exchange shorter work time versus higher work flexibility and increased productivity.

These foreign examples are probably a good illustration of what is likely to happen in Korea. Improving labor relations is a major economic priority and all parties should work in this direction. Unions should drop violent action and embrace dialog, flexibility and change. Government shouldnÆt give in to union intimidation but create new legal frameworks for constructive social negotiations: wage increase in exchange for higher productivity, decreased working hours in exchange for flexible labor schedules. Korean workers should demand from unions, political leaders and management that they create favorable conditions for the needed changes through re-training, stronger social safety net and support to career transition.