Koreans, Thais Scramble to Make Ends Meet

In a spic-and-span waiting room, Jung Yong Shil inspects his Army registration form one last time.

The college freshman is nervous about tough military training. But these days, it's a lot better than frittering away his money in school or looking for a job.

Seeking refuge from South Korea's economic crisis, students like Mr. Jung are crowding Seoul's Regional Military Manpower Office hoping to save money or delay entry into the work force.

Military service in South Korea - mandatory for all males - pays only about $7.40 a month, but at least one doesn't spend anything, Jung says.

"I'm using a lot of money in college," he says. "If I first enter the Army, I can study harder later."

Flooded with applicants, the military has a waiting list for the first time. Jung just hopes he can spend most of his duty as a traffic cop. "It's easy," he says. "If there was no crisis, I'd just want to find a job."

After two decades of stunning economic growth, South Koreans had become accustomed to an abundance of jobs.

Companies made promises of lifetime employment, and workers from poor Asian countries were invited to do the less desirable work.

But a sudden jump in unemployment has Koreans scrambling, trying to find ways to cope with the recession.

With almost no social safety net, the newly unemployed are left to depend on family members and personal savings. Meanwhile, unions are demanding government countermeasures and urging companies not to fire employees.

On May Day, workers clashed violently with riot police for the first time since President Kim Dae Jung took office in February.

With unemployment at 6.5 percent and growing, social problems are increasing quickly.

Considerably more homeless people loiter and sleep in the capital's train and subway stations, and the suicide, crime, and domestic violence rates have jumped.

Korea's social customs offer little comfort for those who have lost their jobs.

Koreans identify personally with the groups they join: When introduced, adults routinely name the company where they work. Losing one's job can mean losing many social ties.

"If you no longer have an association, it's difficult to meet people," says William Cheigh from William M. Mercer, an international labor consultancy.

No safety net

Moreover, workers depend "virtually 100 percent" on their company for benefits like health insurance, cheap housing loans, and scholarships for their kids, says Yoon Young Mo, spokesman for the Korea Confederation of Trade Unions.

Many families have only one breadwinner, making losing a job more traumatic. In the past two months, the idea that one's company is one's greater family "has very much been destroyed," says Mr. Yoon.

With high interest rates choking even healthy businesses, there is little capital left for the recently unemployed to become new entrepreneurs.

But enterprising people are finding a niche.

Down, but not out

On the overnight ferry between Pusan, in South Korea, and Shimonoseki, Japan, a young man reluctantly admits he lost his job with a Pusan company. But he is proud that he is still earning a living.

Sleeping on the ferry every night, he recently joined the ranks of mostly middle-aged, small-time traders who shuttle boxes of noodles and seaweed to Japan, and cosmetics and watches to Korea. "Coming and going [on the overnight ferry] is hard," he says.

At the outset of the financial crisis, the local media were filled with stories of unemployed men who, ashamed to tell their families they had been laid off, hiked in the mountains all day after pretending to go to work.

But these days, losing one's job is regarded as less of a personal failure and more the result of mismanagement by Korea's conglomerates.

Such mismanagement is even reflected in whom companies choose to lay off. Workers complain they aren't being judged on productivity.

Instead, companies keep or fire workers based on "personal submissiveness," says Yoon.

The practice reflects Korea's traditionally strictly hierarchical work environment.

Because the evaluation process is "more subjective than objective ... a lot of workers are staying late to prove their loyalty to the company - even if they aren't busy," says Mr. Cheigh.

Those with jobs are desperate not to lose them. Workers at Kia Motors agreed to a 50 percent pay cut and staged a strike to protest that their bankrupt company not be taken over by a third party who would fire workers.

Layoffs 'last resort'

Conversely, companies have promised they will lay off workers only as a "last resort."

For example, Hyundai Motors' market shrunk by two-thirds this year.

But it decided to send 10,000 of its 46,000 workers home with 70 percent of their pay "instead of laying off American-style," say Shin Hyun Kyu, a Hyundai spokesman.

So far, most of the newly unemployed are middle-aged, white-collar workers. But sweeping layoffs are expected.

Conglomerates will have no choice but to fire hordes of production-line workers in the second half of the year, say financial analysts.

But South Korea needs a job training and social security system first, says Yoon.

Otherwise, he warns that a huge social and political crisis could emerge when people's savings run out.

The public, wanting economic recovery, is more sympathetic to layoffs.

Government worry: strikes

But unions say employers have taken the crisis as a mandate to fire workers and aren't consulting unions. "They're gloating [because they have] the upper hand," complains Yoon.

Unions must "put an end to employers' uncontrolled behavior and to engage them in dialogue," he says. But that might take strikes. "[It] doesn't happen just by making statements," says Yoon.

The trade union confederation recently elected a more radical and less compromising leader, making that possibility more likely.

It's the government's biggest worry. Violent labor protests could scare away the foreign investors South Korea needs to get its economy started again.