KOREA’S ECONOMIC STRUGGLE; CHILD LABOR

Program 9821
May 26, 1998

Guests

Cheol Park, spokesman, Daewoo Industries

Ha Sang Woo, assembly worker, Kia Moters

Mike Brown, President, American Chamber of Commerce in Korea

Chae Mahn-Soo, Deputy Director,
Korean Institute for Labor Studies and Policy

Yoon Young-Mo, International Secretary,
Korean Confederation of Trade Unions

Chong Pyong Do, Student Body President,
Seoul National University

Tom Harkin, Senator (D-Iowa),
United States of America

This text has been professionally transcribed. However, for timely distribution, it has not been edited or proofread against the tape.


KOREA’S ECONOMIC STRUGGLE

MIKE BROWN: [with Korean music in the background] Had the IMF not come in, had there not
been this international support, we would have had a moratorium and the situation would be even
darker today than what it is. We would have run out of money.

JEFF MARTIN: In this edition of Common Ground, though it has not erupted in
violence like Indonesia, the people of South Korea are also feeling the effects of the Asian
economic crisis. And there is no consensus on whether the current measures will improve the
situation.

YOON YONG-MO: This crisis is not something that will end in a couple of months or in half
a year or one year, but, and also the problems will become worse and worse.

MARTIN: And then later in this program, the pervasive problem of child labor.

SENATOR TOM HARKIN: I’ll bet you that half of the people in this room, maybe even myself,
is wearing some piece of clothing made in a foreign country by a child.

MARTIN: Common Ground is a program on world affairs and the people who shape
events. It is produced by the Stanley Foundation. I’m Jeff Martin.

MARTIN: South Korea is undergoing its worse economic crisis since the Korean War. Many
Koreans blame their government and the huge conglomerates that dominate their economy. But they
also deeply resent the International Monetary Fund for imposing harsh austerity measures. Still,
this country, which has a long history of militant demonstrations, is so far experiencing few
street protests. Correspondent Reese Erhlich, reporting from Seoul, looks at that paradox.

REESE EHRLICH: [with sounds of a soup kitchen in the background] At night some 400 men
sleep on the hard basement floor of Seoul’s main train station. At precisely 11:00 a.m., in an
empty lot near the station, religious volunteers serve them rice, kimchee and meat, their only
meal of the day. One middle-aged man standing in line looks different from the rest. He wears
plaid slacks and a windbreaker, with a designer label.

KOREAN MAN: [via a translator] I used to be a manager at an electronics company in the
south of Korea. My company went bankrupt so I tried to find work as a day laborer. But I couldn’t
do that near my home. That’s why I came to Seoul. At night I sleep inside the train station. I
really want to work, even just one day, to get the money to go back home. But there’s no work.
When it’s raining, snowing, or very cold there’s no place to go. We hope to get some official
government relief but so far the government has done nothing.

EHRLICH: Millions of Koreans are facing lay-offs and poverty as the country undergoes a
massive economic crisis. Unemployment nearly tripled in just 3 months, and may hit 10% this year.
Even people currently holding jobs are getting nervous. [sound of heavy machinery in the
background] Outside of Seoul at the Daewoo auto factory no one has been laid off. Yet. Daewoo
invested heavily in technology and therefore hopes to survive the crisis intact. Korean auto
sales dropped 20% so far this year, a sign that lay-offs may be coming, says Daewoo company
spokesman, Cheol Park.

CHEOL PARK: [via a translator] The company promised there wouldn’t be any lay-offs
because of the International Monetary Fund austerity plan. But everyone knows that domestic sales
are way down. So we’re very worried about it and it causes strong emotions. After the IMF bailout
there is a need for economic restructuring. We have to do that to live together. I favor
industrial efficiency. But I personally worry because that policy has personal consequences. I
may be laid off.

EHRLICH: [with Korean pop music in the background] That fear of lay-offs partially
accounts for the lack of big protests against the economic crisis. People are scrambling to
survive. Ha San Soo works on the engine-building assembly line at the Kia Motor’s plant near
Seoul. The economic crisis forced his company into bankruptcy.

HA SANG WOO: [via a translator] We all feel insecure because any day we could lose our
jobs. Since the IMF crisis we haven’t gotten our bonuses, so my annual salary went from about
$18,000 a year to only $5,000. It’s impossible to survive. And because Kia is in bankruptcy we
don’t get the company benefits that we got before.

EHRLICH: Ha’s wife, Mrs. Yoon Hae Kyoung, says the crisis is caused by Korea’s system of
crony capitalism. She says that the big conglomerates, known at chaebols, enjoy a very
cozy relationship with the government. The chaebols can expect guaranteed loans, little
government inspection, and no attempts to break their monopoly power, according to Mrs. Yoon.

YOON HAE KYOUNG: [via a translator] This crisis comes from the government and from the
capitalists. The government didn’t have any reasonable plan for the future. The capitalists
expanded too quickly for their own self-interest. Not thinking of their workers or the nation. I
think the responsibility lies with them. But these days they’re forcing only workers to take
responsibility. They think only workers should sacrifice themselves to revive this country again.
The U.S. and the International Monetary Fund are also to blame because they imposed these
austerity measures on us but not on the chaebols.

EHRLICH: That’s a common sentiment coming from ordinary Koreans, but it’s wrong according
to Mike Brown, President of the American Chamber of Commerce in Korea. He says that late in 1997
the IMF saved Korea from an economic meltdown.

MIKE BROWN: Had the IMF not come in, had there not been this international support, we
would have had a moratorium and the situation would be even darker today than what it is. We
would have run out of money. A moratorium is essentially when there’s a run on the country and
the foreign currency liabilities cannot be serviced anymore.

EHRLICH: And the country can’t pay it’s debts?

BROWN: Yeah.

EHRLICH: While Brown expresses sympathy for those laid off due to IMF policies, he says
the country must get its economic house in order for the sake of both the U.S. and Korea.

BROWN: I think the U.S. has been very supportive to Korea, in trying to restore economic
stability. It’s a critical export market for us, we have sizable foreign direct investment, and
stability is critical to our national interest, both with Korea and in the region. So we know
that they’ll be some, because of high unemployment, because restructuring any economy is very,
very painful, there’s going to be resentment towards IMF and major bilateral partners.

EHRLICH: There’s more than resentment. There’s a seething anger because the IMF is seen as
having inflicted a lot of pain on ordinary Koreans while protecting foreign companies. As
evidence, critics point to the IMF budget priorities. In 1998 about $36 billion in loans will go
to the Bank of Korea to help stabilize the currency. $3 billion will go to a special fund
guaranteeing foreign investments, and only $2 billion will help the unemployed. Critics say that
the IMF policy forcing Korea to maintain high interest rates has also been disastrous. Chae
Mahn-Soo is Deputy Director of the Korean Institute for Labor Studies and Policies.

CHAE MAHN-SOO: [via a translator] The hidden aim of IMF is to meet the needs of U.S.
businesses. The high interest rates in Korea drive down the price of Korean stocks. American
companies can more easily buy Korean corporations. Even before the IMF bailout the flexibility of
the Korean labor market was a primary concern of Korean capitalists. But after the IMF bailout
the needs of foreign capitalists coincided with the needs of Korean capitalism too. Flexibility
means that Korean workers are facing longer hours, more work for less pay.

EHRLICH: [with sounds of marching music in the background] Some people are taking to the
streets to protest IMF and Korean government policies. Outside the Myong Dong Cathedral in
central Seoul, several hundred foreign workers, from Pakistan, Bangladesh, and The Philippines,
hold a rally. [sounds of crowds chanting back and forth “We are labor” and other slogans] It was
a sign of Korea’s relative affluence that until recently tens of thousands of foreign workers
were imported to do the hardest and dirtiest jobs. But the economic crisis has changed all that.
Now they’re laid off and facing deportation. [more sounds of crowd chanting] While the foreign
workers chant militant slogans such rallies are the exceptions these days. For as long as Koreans
can remember, tens of thousands of militant students and workers crammed into the streets for
pitched battles with police every spring. Not this year. [more militant, up-beat music in the
background] Workers aren’t protesting in part because they see the economic crisis as an
individual, rather than a societal problem, according to Yoon Yuong-Mo, International Secretary
of the Korean Confederation of Trade Unions. Yoon says the government and chaebols have
convinced workers that the crisis requires national sacrifice.

YOON YOUNG-MO: The whole idea of crisis is presented and is perceived as a kind of thing
that requires a common effort, as if you’re engaging in a home front effort at times of war, when
a nation goes to war. So it’s crisis is something that affects everyone, the whole nation, so the
whole nation, whole society, everyone must chip in to overcome this problem of the crisis. That’s
the kind of response that’s been driven at this current time.

EHRLICH: President Kim Dae Jung is largely responsible for this attitude. Kim was a
long-time political dissident jailed for opposing previous military regimes. He was elected with
the support of the country’s largest trade union and many other grass roots groups. He’s already
moved to lift certain censorship laws and free some political prisoners. Lee Chan Woo, an
official with the Ministry of Finance and Economy, says his government also wants to eliminate
the crony capitalism that has so long dominated the country.

LEE CHAN WOO: Korean government’s views of financial crisis, or our economic crisis
stemming from the collusion from the government and the chaebols or something. Most of the
people think that market mechanisms do not properly operate in the Korean economy. That’s the
biggest problem in the Korean economy. So as the President says, our economic policy aims to
implement market mechanism in the Korean economy.

EHRLICH: [with background sounds of pounding drums and clanging cymbals] Every spring time
Korean students could be counted on to rally at their universities and charge out into the
streets to protest government policy. These days, at Seoul National University students are more
likely to spend time practicing traditional drumming. [more drums and cymbals] Chong Pyong Do,
Student Body President here, used to lead many of those protests.

CHONG PYONG DO: [via a translator] The Kim Dae Jung administration has tried to harmonize
Koreans from all classes. It’s been largely successful. Kim Dae Jung has advocated democracy and
I assume there will be good developments in that area.

EHRLICH: However, some Koreans think President Kim is knuckling under too easily to IMF
pressure. Union leader Yoon says Korea spends 30% of its budget on defense and it would make
sense to devote some of that to help the poor.

YOON YONG-MO: We felt that it was time now to use the defense spending, to reduce the
defense spending, for purposes of social welfare and social infrastructure. Then when we begin to
make the kind of voices, flies in the Secretary of Defense from the U.S., and says “Korea should
not touch the military budget or they should not cancel the order for the weapons from the U.S.”

EHRLICH: Yoon predicts that as the economic crisis continues more and more Koreans will
get organized. He predicts that opposition and protests against the IMF and government will grow.

YOON YONG-MO: This crisis is not something that will end in a couple of months or in half
a year or one year, but, and also the problems will become worse and worse and as the problems
become established, become real problems, I think by that time there will be sufficient room for
present alternative views of the crisis. And alternative agendas in terms of how to solve, how to
respond to this crisis. When, that does not come naturally. That requires constant effort in the
meantime. But that’s already going on. But those voices, will become much clearer and will become
much more to the surface as time goes along. And when that happens I think there will be more
public responses from the workers and people as a whole.

EHRLICH: [with sounds of marching music in the background] For Common Ground, I’m
Reese Ehrlich in Seoul, South Korea.

MARTIN: We’ll take a break for a moment. When Common Ground continues, measures are
proposed to counter child labor.

SENATOR TOM HARKIN: A company could take a label that’s internationally recognized, that
everyone would agree on, put it on a piece of clothing or tennis shoes or pants or whatever it
might be, sporting goods, and that way you would know that that article was not made by child
labor. Because in order to get that, or put that label on a company would have to agree to
unimpeded, unannounced inspections at any of its plants any time in the world.

MARTIN: Printed transcripts of Common Ground and audio cassettes of this program
are available. Listen at the end of the broadcast for details on ordering. Common Ground
is a service of the Stanley Foundation, a non-profit, non-partisan organization that conducts
varied programs meant to provoke thought and encourage dialogue on world affairs.

CHILD LABOR

MARTIN: Putting an end to child labor has proven to be quite difficult. Manufacturers are
always looking for lower labor costs and developing countries rarely have the resources to
enforce child labor laws. Common Ground producer Keith Porter recently spoke with U.S.
Senator Tom Harkin about new efforts to solve this old problem.

KEITH PORTER: [with sounds of children in the background] These children in Rwanda face
many of the same dangers as children in other developing countries around the world. There is the
potential for malnutrition; there is the chance that they’ll be recruited as child soldiers; and
surviving all that, there’s the very real possibility that they’ll be claimed by the child
workforce.

SENATOR TOM HARKIN: I’ll bet you that half of the people in this room, maybe even myself,
is wearing some piece of clothing made in a foreign country by a child. I just lay odds on it.
Either socks or a shirt or tennis shoes or something.

PORTER: Tom Harkin is a third-term Democratic senator from the state of Iowa.

SENATOR HARKIN: You open up our trade books today and you’ll find our laws specifically
prohibit the importation of endangered species; our laws prohibit the importation of products
made from prison labor, since 1930; but our laws don’t prohibit the importation of products made
from abusive child labor. So I say, we protect ivory, we protect spotted turtles, we protect
prisoners; but we don’t protect kids? And that’s a restraint of trade? This is nonsense. Utter
nonsense. What we were seeing across the globe, as I said, was a manifestation of the new
colonialism where an outside power, in this case economic not government, but an outside economic
power in the form of a multi-national corporation, would step in. Again, not to exploit the
country’s natural resources as had been done in centuries past, but to exploit its human
resources. It’s people. And the ones most prone to that exploitation are the ones whose labor is
the cheapest and the most vulnerable, and that’s the kids.

PORTER: In 1992 Senator Harkin introduced the Child Labor Deterrence Act.

SENATOR HARKIN: I’m not talking about children who work part-time after school, who work
on the week-ends, summer jobs, things like that. I worked in my youth, I’m sure that all of you
did too. There’s, I always try to distinguish between child work and child labor. You know. The
issue is children who are forced to work in hazardous conditions, long hours, for little pay,
they’re denied an education and the opportunity to grow and develop. It’s the kind of work that
endangers their physical and emotional well-being. And make no mistake, when the growth of
children is stopped so is the growth of a nation. So I look upon exploitative child labor as more
than just a humanitarian and a moral issue, it’s an issue that also has developmental dimensions.
It’s a developmental issue because no country today can hope to take part in the process of
globalization and economic growth if it cannot count on it’s principal resource, its people.
Social development is an essential component of sustainable economic development. Countries that
fail to provide their children an education are assuring that 10, 15, 20 years from now their
most important resource, their adult workforce, will be uneducated, ill-prepared, and
ill-equipped to advance their countries beyond the fringes of an integrated global economy.

PORTER: What effect does child labor have on the global labor market and on wages
world-wide?

SENATOR HARKIN: Well, obviously it has a depressing effect on wages world-wide. Companies,
because of the international nature of these businesses, can move from one country to another.
And that’s why we need a kind of a global approach to ending child labor. Just to keep that kind
of forum shopping from happening.

PORTER: Yeah, you know often times when we want to stop chemical weapons or biological
weapons or we want to protect the air or the oceans we use international treaties and protocols.
Will that work in this case?

SENATOR HARKIN: I believe so. We have a history of, Conventions on the Rights of the
Child, for example. The U.N. Declaration on Human Rights. Plus almost every country has signed up
to the International Labor Organization, ILO Convention 138, which spells out in quite specific
detail prohibitions against child labor. So in many of these countries they’ve already signed on
to this. We just want them to live up to the letter of the law.

PORTER: You mentioned the Convention on the Rights of the Child. We are one of two nations
that are not on-board. What are the chances the President’s going to send this to the Senate, and
then what would happen after that?

SENATOR HARKIN: Well, the problem is under our constitutional system of government, since
we don’t have a parliamentary system, for example, the President, as executive can sign it, but
it must be ratified by the Senate. And the fact is the Chairman of the Senate Foreign Relations
Committee, Senator Jesse Helms of North Carolina, has said he is opposed to the Convention on the
Rights of the Child. And would not push it, would not let it go through. So right now we’re at a
stalemate now and hopefully something will change and perhaps we’ll get a different chairman or
something like that and we can get it through. I would point out that most of the provisions in
the Convention on the Rights of the Child we adhere to in this country. With a couple of
exceptions. But I think that we could deal with those.

PORTER: During a human rights address at The University of Iowa, Senator Harkin said he’s
working on new legislation which would allow clothing manufacturers to voluntarily join a child
labor inspection program. Those who pass inspection could use a special label indicating that
their products were made without child labor.

SENATOR HARKIN: This labeling I think is necessary for three fundamental reasons. First,
it takes a comprehensive approach. Government can’t do it alone, Department of Labor can’t do it
alone, human rights groups can’t do it alone. We have to attack it from all fronts and I think by
enlisting consumers we could help. Second, labeling is based on choice. Companies can choose
whether or not to use the label; they don’t have to if they don’t want to. And by being fully
informed consumers can choose to vote against child labor with their pocket book. And I think
this consumer information could be a powerful part of a comprehensive approach against child
labor. And the third reason I think labeling is, will work, is because it’s practical. We have
experience with it. An initiative called “Rugmark” for hand-knitted Oriental carpets has been
very successful. They have exported over 630,000 rugs world-wide with a label that ensures that
consumers who buy it, that these carpets were not made by children. And so it’s working.

PORTER: Absent some international protocol, we are the biggest importer. What is it that
we can do in this country to make a difference in child labor?

SENATOR HARKIN: One of the biggest things is just not, either not import items made by
oppressive child labor, but secondly, to have a system of labeling. To promote a system of
voluntary labeling where a company could take a label that’s internationally recognized, that
everyone would agree on, put it on a piece of clothing or tennis shoes or pants or whatever it
might be, sporting goods, and that way you would know that that article was not made by child
labor. Because in order to get that, or put that label on a company would have to agree to
unimpeded, unannounced inspections at any of its plants any time in the world. Well such a thing
is happening right now with soccer balls. In Pakistan. Ninety percent of the soccer balls in the
world are made in Pakistan in a little area, mostly by kids as young as 4 years of age. We have
in the last couple of years entered agreements over there to get them out, and they’re going to
use a label. On soccer balls. So you will know that if you buy a soccer ball with that label it
was not made by child labor.

PORTER: There’s been a successful effort to do this with rugs, right?

SENATOR HARKIN: Absolutely. And this is where I got the idea. There’s a label called
“Rugmark.” It was started by a non-governmental organization in India. And it’s grown
substantially and so that in the carpet industry, mostly they’ve been doing it in Europe. And
it’s now hitting America. And they have this label that they sew on the back of carpets. It has a
number on it and so they know where it came from. And any carpet manufacturer that wants to use
that label has to agree to unimpeded inspections at any time. And right now—and this Rugmark is
only just a few years old, I am sorry, maybe 4 or 5 years old—they’re now up to over half a
million carpets now sold with the Rugmark label. And it’s just escalating. Because consumers now
are demanding it. They don’t want to buy a carpet made by eight and nine-year-old kids. And so I
visited some of the plants in Nepal and where they have the Rugmark label. And they’re making
money.

PORTER: Senator Harkin has actually taken part in the inspection regime for Rugmark. It’s
the same kind of program he wants extended to clothing manufacturers.

SENATOR HARKIN: We have labels, and when you buy a shirt you know the label says, it has
to say what the contents are; how much cotton, rayon etc. is in it. It also has to tell you what
country it’s made in. But there’s no label that says “this is child labor free.” Like the Rugmark
label. It would be a very simple thing to do. And so part of my trip to Bangladesh we went to
Nepal afterward and the Nepalese people, carpet people, were telling us, “Well, we don’t have
that problem. We don’t employ kids.” Well, I knew of a young man who had been a child laborer and
we set up a surprise visit. ‘Cause obviously if you, if they know in advance you’re coming
they’ll get the kids out. Well this young man who’d been a child laborer but who now works for
human rights organization, a non-governmental organization, said he knew of a plant, he thought
the owner would be away, he knew the guard at the gate and he could get us in. So on a Sunday
evening, just about the time darkness was falling, we climb in this little car, drive to the
outskirts of Katmandu and go up to this gate. And first thing I noticed outside the gate was this
sign in both Nepalese and English: “Child labor under the age of 14 is strictly prohibited.” Had
it posted right outside. So I took a picture of it. Well, the guard let us in and we went in and
this is what we found: Here’s the kids. Some of these below ten years of age; a lot of them 10,
9, 8, 11 years old. All these kids working in rows and rows. So I started taking a lot of
pictures and wouldn’t you know it the owner showed up. We thought he was gone, he wasn’t and he
was quite upset. Very contentious and of course we had to leave, but he couldn’t take my camera.
And the next day we went to another carpet place in Katmandu that uses the Rugmark label. No
kids, all their carpets had the Rugmark label on them, and they market ’em. So don’t tell me it
can’t be done. And I must say that the carpet plant that uses the Rugmark and doesn’t employ kids
happens to be quite profitable. I mean they are making money. It’s just that these places
obviously are making scandalous profits off the use of their kids.

PORTER: One last question for you. We do have a child labor situation in this country.
Sometimes it involves sweatshops; often times it involves migrant workers. What can we do about
that?

SENATOR HARKIN: Well, sad to say that is true. We do have it in this country. What we have
to do is to continue to beef up our enforcement and to use whatever law enforcement methods we
have to detect ’em and to crack down on these people. We have the laws against it and every time
we find it prosecution is pretty swift. The one area where we really have to stop this is in
migrant labor. And these kids working in these fields. It’s so widespread and we just haven’t had
the enforcement abilities but Secretary of Labor Herman has started a new effort this year. She
calls it “Operation Salad Bowl.” To put more inspectors out in the field to get these kids and to
go after the owners for allowing that to happen. I mean, they know who’s working in those fields.
And so hopefully we’ll have some success this year in really tightening down on this one.

PORTER: That is U.S. Senator Tom Harkin. For Common Ground, I’m Keith Porter.

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