South Korea's '4-year fixed-term' debate highlights labor polarization

A contentious proposal within South Korea's upcoming 'Mega Special Zone' legislation to extend the maximum duration of fixed-term employment contracts from two to four years has ignited fierce debate, pitting government economic development goals against labor rights and protections.

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It is only natural that non-regular workers should receive higher wages than regular workers because their job security is not guaranteed.

President Lee Jae-myung has previously stated that non-regular workers, due to their lack of job security, should receive higher wages than permanent employees. This principle aligns with systems in countries like Australia, France, and Spain, which offer additional pay or "instability allowances" for temporary workers, aiming to incentivize permanent hiring. However, in South Korea, non-regular workers typically earn about half the wages of their permanent counterparts, face discrimination in benefits, and live under the constant threat of contract termination.

The proposed extension of fixed-term contracts, alongside considerations to relax the 52-hour workweek limit, has drawn sharp criticism. Labor unions and many experts argue that these measures would legitimize long-term precarious employment, potentially reducing companies' incentives to hire permanent staff. This could lead to a growing number of young workers trapped in temporary positions with limited career progression, further deepening labor market polarization.

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Companies will think, 'We can legally employ non-regular workers for a longer period, so there's no need to hire regular employees.'

South Korea has a significant non-regular workforce, estimated at 8.57 million people, or about 38% of all wage earners, as of 2025. This precarious employment situation is seen as a contributing factor to the country's high suicide rate and extremely low birth rate. While the government aims to create "good jobs" through major projects, critics question how extending temporary contracts and loosening labor regulations will achieve this goal, suggesting it may instead worsen economic inequality.

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The system needs to be changed so that the fruits of economic growth are not concentrated in the hands of a few elites or large tech monopolies, but are shared by the entire working class.