The Korea Herald

피터빈트

[Editorial] Moral hazards

Ethics of public enterprise employees worsen under pro-labor policy

By Korea Herald

Published : March 12, 2021 - 05:31

    • Link copied

A person presumed to be an employee of the Korea Land & Housing Corp. on Tuesday posted a message titled “Nobody Cares Here” on Blind, a popular online community of salaried workers that guarantees anonymity. Only subscribers certified by the community through their company email accounts can post there.

The post says of LH employees’ attitude, “After all, this issue will be forgotten in one or two months. It shall pass like water flows. I think so too. LH employees purchased land in new towns under borrowed names so how can they find (evidence of speculation)? … No matter how angry the public becomes, I will work securely until retirement age while speculating under borrowed names. This is the benefit and welfare that only our company provides. If you envy us though our behavior is provocative, why not move over to our company? You failed to enter our company because you did not study hard.”

Another putative LH employee posted a photo of protesters and a message from a KakaoTalk chat room with participants assumed to be his or her colleagues Monday. The message reads, “We are on the 28th floor, so we can’t hear anything (from the protesters). That’s so funny.” At that time, in front of the LH headquarters in Jinju, South Gyeongsang Province, about 50 farmers were holding a rally against the suspected illegal farmland speculation by LH employees and their families.

On Jan. 31, when the Korean Broadcasting System came under fire for its reckless management, an employee of the network posted a message on Blind: “No matter what you say, retirement age is guaranteed. ...The average pay of our company employees is 100 million won ($87,800). Please stop cursing us. If you can, be a KBS employee.”

These posts reveal an aspect of the collapsed ethics of public enterprise employees.

State-run enterprises are among the most enviable organizations for young job seekers for offering relatively high wages and good job security. On the other hand, they have chronic problems such as lax management, corruption, and a tendency to appoint outsiders by order from the top.

According to the office of Rep. Kim Sang-hoon of the opposition People Power Party, four of 14 LH board members -- a standing auditor, a nonstanding auditor and two nonstanding directors -- have direct or indirect ties with President Moon Jae-in. The standing auditor worked on Moon’s 2012 presidential campaign. He received 175 million won in annual pay in 2019, when the land speculation in question would have occurred. The board faces criticism that it did little to prevent employees from speculating on land using information they obtained in their roles.

Past governments struggled hard to reform public enterprises only to fail. A strong and persistent push to straighten them out is badly needed. But the Moon administration rather aggravated the problems by bloating the public sector.

On the 2017 presidential campaign trail, Moon vowed to increase the number of government and public enterprise employees by 174,000 and 640,000, respectively, during his five-year term. Under his pro-labor policy pledge, he promised that public enterprises would hire irregular workers of subcontractors as regular staff. For about 3 1/2 years from July 2017 to late last year, 199,538 irregular workers of subcontractors turned into regular employees of public enterprises. LH added 2,978 subcontractor employees on its payroll.

The government made state-run corporations bigger, but paid little attention to the need for qualitative change. They should have strengthened their work ethic, increased respect for law and tightened internal controls.

Compared to private companies, employees of public enterprises face a lower risk of losing their jobs, weaker pressure for profits and less responsibility for losses. The positions may be favored by job seekers, but the adverse effects are serious. Land speculation suspicions are spreading beyond LH.

Problems were festering while the Moon administration made public enterprises bulky and more inefficient. The land speculation in question exposes the problems of a bloated public organization. Many who lack a sense of ethics work not only in public enterprises, but also in the government, legislature and judiciary. The state system will be in danger unless the problems are addressed quickly.