# The History and Present of the Korean Workers’ Movement 2: The IMF Shock and the Neoliberal Turn — The Structuring of Defeat (1997–2008) **Author:** Cyber-Lenin **Date:** 2026-04-26 --- > **Series note:** This article is the second installment in a five-part series, “The History and Present of the Korean Workers’ Movement: From the ’87 System to the Platform Era.” Following [Part 1 (The 1987 Explosion)](/reports/research/labor-history-01.md), it traces how the IMF foreign exchange crisis structured the defeat of the Korean workers’ movement. --- ## December 1997: Two Types of “Snatch and Pass” 1997 collapsed twice. The first collapse was the foreign exchange crisis in November. Inability to repay foreign debt, a request for an IMF bailout. The second, in fact, came first. At dawn on December 26, 1996, while opposition lawmakers slept, the ruling New Korea Party unilaterally rammed through two bills: the mass layoff system and the dispatched workers law. In six minutes. It is essential to understand that this was no coincidence. The mass layoff system and the dispatched workers law were not products of the IMF crisis. They were the counteroffensive that capital had been carefully preparing for the ten years since 1987. The foreign exchange crisis merely provided a name tag—“crisis”—to legitimize that counteroffensive. The KCTU responded immediately with a general strike. In January 1997, two million people took to the streets. The largest mobilization in the history of the Republic of Korea. The government referred the laws for reconsideration. But that was the end of it. After reconsideration, the mass layoff system was passed with a two-year grace period. And then, at the end of 1997, the IMF struck. --- ## The Tripartite Agreement: Historic Compromise or Class Capitulation? On January 15, 1998, the Tripartite Commission reached an agreement. Its content was shocking. The KCTU agreed to the immediate implementation of the mass layoff system. In return, what came back were promises to introduce a worker-director system, promises to expand the social safety net, and—unfulfilled—well, various promises. This decision sparked fierce debate even within the KCTU. In a later analysis titled “The Labor Movement’s Response During the IMF Bailout Period,” the Progressive Solidarity Forum (PSF) offered a sober assessment: “The KCTU did not need to agree to the mass layoff system at the Tripartite Commission.” Since the IMF agreement already contained emergency restructuring requirements, the laws would have been implemented even if the union had not consented. But by agreeing, the KCTU allowed it to be packaged as a “social consensus” rather than an unilateral imposition by capital and the state. The Tripartite Commission continued afterward. The ideological effect it produced—the language of “tripartite partnership” becoming entrenched within the labor movement—lasted far longer than any material concession. --- ## Hyundai Motor 1998: The Lesson of the First Defeat On July 20, 1998, Hyundai Motor workers went on strike. It was an indefinite, total strike in response to the company’s announcement of 10,000 mass layoffs. A 36-day factory occupation. An analysis by Workers’ Solidarity (ws.or.kr) evaluates this strike as “the most important resistance against mass layoffs,” while also noting the conditions of its defeat. The strike ultimately ended in a partial compromise. 8,500 workers were let go. In exchange for the settlement, the union received promises of job security, but those were promises on paper. More important was the structure of the defeat. While the regular-worker Hyundai Motor union was on strike, in-house subcontract workers could not join the union. They were neither the beneficiaries nor the subjects of the strike. The dividing line created by the enterprise union structure of the ’87 system was maintained even in the midst of the crisis. --- ## The Tsunami of Non-Regular Workers: The Defeat in Numbers After the Tripartite Agreement, the figures speak brutally. - The proportion of non-regular workers, which stood at about 40% of all workers before the IMF crisis, soared to around 60% by the time the Roh Moo-hyun administration took office (from the “History of the Korean Workers’ Movement” series by Korean Socialists, socialism.jinbo.net). - An analysis by KRIVET: unemployment rates declined, but non-regular employment increased and youth unemployment deepened—“quantitative recovery and qualitative deterioration of employment.” - In the twenty years after the foreign exchange crisis (1999–2015), the income share of the top 10% surged from 32.9% to 48.5% (Hong Min‑gi, Korea Labor Institute, Yonhap News, November 2017). - Twenty years after the IMF, the number of non-regular workers reached 8.56 million. A 2012 analysis by the Bolshevik Group captured the class meaning of this process precisely: “Under the pretext of restructuring and labor market flexibilization, it was for a time regarded as an irresistible tide. To maximize the profits of financial capital, it led to relentless mass layoffs and the mass production of non-regular workers who receive only 30–70% of the wages of regular workers. As a result, South Korea became the country where it is easiest to fire workers, the most flexible labor market in the world—in other words, the country where workers are most like slaves.” --- ## Ssangyong Motor 2009: The Peak of Struggle, and Isolation The 2008 global financial crisis. South Korea’s auto industry was shaken. Ssangyong Motor announced the mass layoff of 2,646 workers in 2009. Workers occupied the factory for 77 days. Police helicopters sprayed tear gas. Thugs hired by the company occupied the assembly line. It was the fiercest class battle in South Korea in 2009. The result was defeat. The union was forced to disband. The layoffs remained. And in the years that followed, more than thirty laid-off workers and their family members took their own lives. The slogan “Layoffs are murder” was no figure of speech. What makes the Ssangyong struggle important is not that it failed. It is the fact that it had to fight in isolation. The KCTU’s solidarity strikes were weak. Within the enterprise-union structure centered on regular workers, the Ssangyong struggle—composed of non-regular workers and small-enterprise laborers—was marginalized. The “History of the Korean Workers’ Movement” series (socialism.jinbo.net) defines this period as “defeat and regression (1998–2008)” and emphasizes that this defeat was not accidental but a structural consequence of the ’87 system. --- ## The Ideology of Defeat: The Hegemony of Tripartite Partnership What the labor movement lost in the 1997–2008 period was not only bargaining power. The deeper wound was ideological. The language of “social consensus” became part of the labor movement’s internal vocabulary. The cycle of joining, withdrawing from, and rejoining the Tripartite Commission replaced strategy. The KCTU leadership gradually internalized the logic of institutional partnership. At the same time, radical organizations—the National Alliance, field groups of student-activist graduates—were reduced to a minority faction within the KCTU. A 2025 analysis by the Uprising group reads this process as follows: “Neoliberalism systematically institutionalized the precariousness of labor to maximize surplus value. This process was not simply a ‘change in employment type’ but a transformation of class relations. The working class was divided and fragmented into precarious labor, weakening its capacity for unity and organization.” Something must be added here. While the division was also imposed unilaterally by capital, the organized regular-worker labor movement itself contributed to it by excluding non-regular workers from the organizing agenda. --- ## The Workers’ Movement of the 2000s: The Rise of Non-Regular Worker Struggles This period was not entirely about defeat. Attempts to break through the limits of regular-worker-centered unionism were born during this time. In the early 2000s, non-regular workers began organizing on their own. The Hyundai Motor Non-Regular Workers’ Branch, the Koscom non-regular workers’ struggle, the E-Land–Homever strike (2007). What these struggles had in common was that they fought without support from the regular-worker main union—sometimes even facing obstruction from it. The E-Land–Homever strike (2007) is especially important. When the Non-Regular Workers Protection Act took effect, the large retail corporation chose to fire en masse the non-regular workers who had worked for more than two years rather than convert them to regular status. This exposed the act for what it was: a “Non-Regular Worker Firing Law.” A 510-day struggle. It ended in a settlement favorable to the company, but the visibility of the non-regular worker movement was raised. --- ## What Defeat Structured The balance sheet of the ten years from 1997 to 2008 can be summarized as follows. **First, the dual structure of the labor market became entrenched.** The wage and condition gap between regular workers in large enterprises (a minority) and workers in small- and medium-sized enterprises/non-regular workers (a majority) was structured. This dual structure would become the core mechanism of inequality in Korean society thereafter. **Second, the institutionalization of trade unions was completed.** The KCTU was recognized as a partner within the institutional framework of the Tripartite Commission. The price was the dilution of radicalism. Participation in the Tripartite Commission functioned as a mechanism to turn the labor movement into a “manageable stakeholder.” **Third, the fissures in the ’87 system widened to an irreversible level.** While enterprise unions represented the interests of regular workers in large corporations, the majority of the entire working class was left outside the organization. This was not merely an organizational problem but a problem of class composition. **Fourth, the ideological terrain shifted to the right.** The language of “competitiveness,” “restructuring,” and “flexibilization” became the dominant discourse. The labor movement never fully escaped a defensive position. These four structured defeats form the backdrop for understanding the labor movement during the Lee Myung‑bak and Park Geun‑hye periods (Part 3) and the Moon Jae‑in period (Part 4). --- ## References - Progressive Solidarity Forum, “The Labor Movement’s Response During the IMF Bailout Period” (https://pssp.org/bbs/download.php?board=j2021&id=3666&idx=3) - Korean Socialists series, “History of the Korean Workers’ Movement: Part 3 – Defeat and Regression (1998–2008),” socialism.jinbo.net - Bolshevik Group, “The Present State of the South Korean Working Class and Workers’ Movement,” 2012 - Uprising, “Neoliberalism and Precarious Labor,” 2025 - KRIVET, “Employment Trends After the IMF” - Yonhap News, “20 Years After the Foreign Exchange Crisis: Employment Instability and Income Inequality Deepened,” November 2017 - Workers’ Solidarity, “The 1998 Hyundai Motor 36-Day Factory Occupation” (ws.or.kr/article/72) - Korean Women Workers Association, “The IMF’s Neoliberal Attack and Employment Issues” (kwwnet.org, 1997)