Park Yong-maan, chairman of Doosan Group and head of the Korea Chamber of Commerce and Industries, on Wednesday warned that wage hikes will be unavoidable in the longer term following a recent court ruling that bonuses, if paid regularly, should be considered part of ordinary pay.
“Companies will be feeling enhanced pressure on labor costs in the mid- to long-term,” said the business tycoon, who is leading the nation’s largest and oldest business lobby group.
“I think now is the time to come up with clearer regulations in our wage system,” he said, citing confusion across industries after the landmark wage ruling last month. He, however, was cautious about the immediate impact of the single ruling as several other cases were still underway.
The 59-year-old took the helm as KCCI chief in August at the peak of the pay disputes. Since then, he has had several meetings with lawmaker and business leaders to speak on behalf of both small and large companies.
“These days I spend 51 percent of my time on KCCI work and 32-33 percent on Doosan,” he said of his busy schedule. He is actually the fourth in his family after his father, the late Park Doo-byung, who founded Doosan, and his brother Park Yong-sung, to hold the chairman position
Since his inauguration, Park has pledged to counter the public’s hostility toward local businesses, especially large conglomerates that are sometimes criticized for their owner families controlling the entire group with tiny shares.
“Now companies are ready to accept calls for change. I also want to ask the public to give support to their reform efforts,” he reaffirmed.
The chairman of the nation’s 12th-largest conglomerate, who calls himself an optimist, admitted that the business environment this year would not be positive considering slowing exports and reduced government spending.
“The domestic market will be crucial for Korean businesses and the competition will be fierce. The service sector will lead the growth overall,” he said.
But he saw no serious impact from the U.S. government’s quantitative easing on the Korean economy. “Countries at their full-blown bubble will be hit hard by the tapering. But Korea will see limited impact,” he said.
“But when it comes to outside factors like a volatile exchange rate, I think the Korean economy is more vulnerable compared to advanced countries and the government sometimes needs to help by interceding.”
Park also urged a paradigm shift in the new era of entrepreneurship.
“In the previous manufacturing-driven economy, we used to stress the can-do spirit. But in today’s innovation-driven economy, business leaders are required to seek the right platform continuously,” he said.
By Lee Ji-yoon (firstname.lastname@example.org)