The development of the Korean economy is heavily influenced by labor union activity.
Many large Korean companies, except in a few rare cases, are unionized, attributed greatly by the 1987-1989 Great Labor Offensive period (Lee and Lee, 2005). In general, unions in Korea have had strong impact on improving the life of workers, including wage level, job security, and working conditions. This strong impact, however, also increased labor cost and may have actually hindered companies' competitiveness in the market, particularly the global market.
II. Union and Human Resource Development
The research on the relationship between union and human resource development, ...view middle of the document...
It results in upheavals
in working lives and makes it necessary for a firm to have substantial involvement in
training and development.
In responding the this change, trade unions have increasingly emerged as major
partners in the development of lifelong learning, as well as such issues as change
management, productivity improvement, communications and personnel function,
although many other unions are still reluctant to acknowledge the value of learning and
training in the workplace (Smith, 2003; Trade Union Congress(TUC), 1999). For
example, the Union Learning Fund in U.K., which assists unions in helping workers
benefit from learning opportunities at work, started in 1998 with .4 million, and was
instrumental in allowing unions to appreciate the role of learning in their activities
(Taubman, 2004). Taubman firmly argues that learning should be the key concept in
twenty-first century union activities. In doing so, both attempt to defend the interests
of their members, as well as contribute towards the profitability of individual
companies, and the general wealth of the country.
1. Unions and Training
Examination on the impact of unions on training and development must begin with the key distinction between general and firm-specific human capital. These two types of human capital differ considerably in the entity that pays for training, and that entity that reaps the rewards, as well as having different implications for job stability. The standard human capital theory states that workers will invest in human capital, but firms will not. Workers must pay for the investment in human capital by accepting lower wages during the training period, when productivity is reduced because they are taking time out for training(Gilbert, 2003). Firm-specific human capital, in contrast, is valuable only at a particular firm. This implies firms invest in this type of human capital, without fear of losing trained workers. Becker (1964) adds a new position that firms will optimally share the investment because workers may leave the company, without loss, if they do not invest at all in training. However, Hashimoto (1981) and Barron et al. (1999) counter-argue that firms carry the full burden of specific human capital investment, and also reap the rewards.
2. Empirical Evidence on Unions and Training
The research on the effect of unions on human resource development have several directions, including skill formation or development, technology change and automation process, team work, and high performance/involvement work systems. The focus in this paper...