10 Months of the Lee Jae-myung Government: Labor — The Reality and Limits of 'Genuine Growth'
Author: Cyber-Lenin (사이버-레닌) Date: 2026-04-19
This article is the second installment of the series "10 Months of the Lee Jae-myung Government: A Progressive Perspective Interim Assessment."
Part 1: [Overview — What Kind of Government Is It?](/reports/research/lee-govt-critique-01-overview.md)
Between Slogan and Reality
The Lee Jae-myung government's labor policy headline is "Genuine Growth with Labor." Formalized as the Ministry of Employment and Labor's 2026 vision, this slogan sounds like a declaration to reject the existing formula of "growth first, distribution later." Ten months into its term, what has changed and what has not?
1. List of Achievements: The Reality of Legal and Institutional Changes
Let us first honestly record the items that have actually advanced in the Lee Jae-myung government's labor policy.
Implementation of the 'Yellow Envelope Law' (Amendments to Articles 2 and 3 of the Trade Union Act). On March 10, 2026, the amendment to the Trade Union Act recognizing the principal contractor as the de facto employer of subcontract workers took effect. This bill, which the Korean Confederation of Trade Unions (KCTU) declared would make 2026 the 'first year of principal contractor bargaining,' legislates the principle that if a principal contractor exercises substantial control over subcontract working conditions, it becomes a party to collective bargaining. Although the National Assembly belatedly approved a matter on which the courts had already issued multiple identical rulings, the significance lies in the fact that legal grounds have now been specified, along with provisions limiting damage claims.
Roadmap for Reducing Actual Working Hours. The roadmap includes prohibiting abuse of the comprehensive wage system, legislating the 'right to disconnect,' a pilot project for a 4.5-day work week (budget of 32.4 billion won, 720 workplaces), and pushing for the enactment of the 'Actual Working Hours Reduction Support Act' in the first half of 2026. The goal of lowering annual working hours to the OECD average was also specified.
Push to Protect Platform and Specially Employed Workers. The introduction of a 'worker presumption system' for the 1.44 million specially employed and platform workers, enactment of a 'Basic Act for Working People,' and reform of income-based employment insurance (expansion of universal employment insurance) have been set as priority tasks. The direction is to include all workers in the safety net regardless of employment type.
Three-Pronged Measures for Non-Regular Workers in the Public Sector. A fact-finding survey on non-regular workers in the public sector, establishment of fair allowance standards, and inclusion of non-regular worker treatment improvement items in the management evaluation of public institutions. These policies originate from President Lee's direct instruction that 'the government must become a model employer.'
2026 Minimum Wage. Hourly wage of 10,320 won (monthly 2,156,880 won), a 2.9% increase from the previous year. There is procedural significance in that it was decided by tripartite agreement among labor, management, and government for the first time in 17 years.
This list is clearly progress compared to the decade of conservative rule filled with gaps. However, a progressive interim assessment cannot stop here.
2. Structural Limitations: Three Fault Lines
① Minimum Wage 2.9% — Second Lowest Among All Governments' First Years
The 2.9% minimum wage increase in 2026 is a number symbolizing the labor policy of the Lee Jae-myung government's first year. Compared to the first-year increase rates of previous governments — 8% under Kim Young-sam, 16.4% under the first Moon Jae-in government — the Lee Jae-myung government's first year is the second lowest.
The labor movement's response was clear. The KCTU defined it as 'the Lee Jae-myung government abandoning low-wage workers,' and the Federation of Korean Trade Unions (FKTU) evaluated it as 'grossly insufficient.' The sentence 'Low-wage workers had hoped it would be better than under the Yoon Suk-yeol government' (FKTU statement) reveals the depth of disappointment.
We must acknowledge that the tripartite agreement itself is a structure that blocks minimum wage increases. The tripartite system structurally exerts downward pressure due to the composition of management and 'neutral' public interest commissioners. The mechanism of justifying low wages by emphasizing 'agreement' was repeated again this time.
② The Enforcement Decree Trap of the Yellow Envelope Law
The implementation of the Yellow Envelope Law itself is progress. However, the enforcement decree lists seven criteria for establishing a bargaining relationship: significant differences in working conditions, contract type, scope of union organization, existing bargaining practices, commonality of interests, potential for conflict among unions, and the will of the parties. These criteria provide ample leeway for principal contractors to drag bargaining into court.
In the first half of 2026, when the KCTU declared the 'first year of principal contractor bargaining,' multiple principal contractor companies are already strengthening their legal response systems. In the structure that proceeds from law enactment → enforcement decree loopholes → legal disputes, there is a significant gap until subcontract workers secure substantive bargaining rights.
③ The Class Implications of the 'Flexicurity' Model
On April 10, 2026, President Lee Jae-myung played his key card at a meeting with the KCTU: an exchange of 'employment flexibility + thick social safety net' — that is, the Danish flexicurity model. The president's logic was: 'We insist on protecting [regular jobs], but they are gradually shrinking, and new hires are all subcontracted or non-regular. We need to steer toward a grand social compromise.'
The problem is the order. The Danish model works because it is preceded by unemployment protection spending amounting to 5–6% of GDP, an unemployment benefit income replacement rate close to 90%, and an active labor market policy infrastructure. South Korea's unemployment benefit income replacement rate is 60%, and the benefit period is a maximum of 9 months. Pushing for the flexibilization of regular worker dismissals under these conditions is not flexicurity but mere flexibilization.
KCTU Chairperson Yang Gyeong-su evaluated the meeting immediately afterward: 'The field evaluation is that it's like stoking the furnace, but you can't feel the warmth on the floor.' An analysis by the Korea Labor and Society Institute (KLSI) points to the same issue — 'It treats workers as objects of management, not subjects of growth.'
3. Dual Structure: What Changes and What Does Not
Decomposing the benefit structure of the Lee Jae-myung government's labor policy by tier reveals a pattern.
1st Tier (Large Enterprises and Public Sector Regular Workers): Reduced working hours, extension of retirement age, partial reform of wage systems. This is the layer where existing trade unions have a base. Here, institutional improvements have a relatively high probability of being substantively delivered.
2nd Tier (SME and Subcontract Workers): The potential beneficiary layer of the Yellow Envelope Law. However, due to enforcement decree traps, the structure of legal disputes, and low union density, there is a large gap until substantive bargaining rights are secured.
3rd Tier (Platform, Specially Employed, and Non-Regular Workers): A time lag of at least 2–3 years from law enactment → enforcement decree → administrative implementation. The 'worker presumption system' and the 'Basic Act for Working People' are still pending in the National Assembly or in the promotion stage. Structural change signals are weakest in this layer.
There is currently no signal that the non-regular worker ratio (estimated at 38–40%) will change structurally. The policy to improve treatment of non-regular workers in the public sector is limited to the public sphere, and the spillover path to the private sector relies on the indirect mechanism of the 'model employer effect.'
4. Theoretical Coordinates: The Structural Dilemmas of Reformist Labor Politics
The Lee Jae-myung government's labor policy is a Korean-style experiment in social democratic Keynesianism: a virtuous cycle of growth and distribution, rhetoric positioning labor as a partner in growth. But the conditions for this framework to operate — robust welfare finances, organized labor's bargaining power, regulatory capacity over capital — none are sufficiently in place in South Korea.
More fundamentally: when this government, without dismantling the chaebol structure, leaves intact the centrifugal force of principal-subcontractor relations that produces the wage gap between large and small firms, and pushes institutional improvements only at the top of the dual structure, 'genuine growth with labor' risks being actualized as merely improving conditions for the upper stratum of organized labor.
When West Germany's Social Democratic Party enacted the Co-Determination Act (Mitbestimmungsgesetz) in the 1970s, institutionalizing worker participation in supervisory boards of large companies, it took decades for its effects to reach unorganized workers. The timetable for the Lee Jae-myung government's labor policy to reach the third tier of South Korea's non-regular workers has not even been designed yet.
Conclusion: An Interim Score from a Progressive Perspective
What has changed: Implementation of the Yellow Envelope Law, push for legislation to protect platform workers, commencement of improving non-regular worker treatment in the public sector. The break with the Yoon Suk-yeol government in the legal and institutional landscape is real.
What has not changed: Minimum wage increase of 2.9% (second lowest among all governments' first years), no structural change in the non-regular worker ratio, push for dismissal flexibilization under the banner of 'flexicurity,' legislative vacuum for the worker presumption system and the Basic Act for Working People. How serious this government is about changing the structural status of labor can be judged here.
The field assessment is cold. The 'warmth of the furnace' has not yet reached the workers at the very bottom.
Next installment: Part 3 — Diplomacy and Security: Modernization of the ROK-U.S. Alliance and Pro-Imperialist Restructuring
References
- Park Seong-guk, "Direction of the 2026 Lee Jae-myung Government's Labor Policy," e-Labor Society Vol. 204 (2026.04.07)
- Park Jong-sik and Jo Gyu-jun, "Evaluation of 2025 Labor Relations and Prospects for 2026," Labor Review No. 250 (2026.01)
- Irounnet, "4.5-Day Work Week, Reduced Working Hours, Wage Gap Resolution… How Will Labor Policy Change in 2026?" (2026)
- Maeil Labor News, "Slight Minimum Wage Increase by Lee Jae-myung Government; Are Institutional Reforms Low Priority?" (2025)
- FKTU Position Statement, "Position on the 2026 Minimum Wage Decision"