The 52-hour maximum workweek cap introduced by the Moon Jae-in government last year could wipe out as many as 400,000 jobs and pare gross domestic product by 10 trillion won ($8.86 billion, a private institute claimed.

According to Pi-Touch Institute, a Seoul-based research agency, the universal 52-hour workweek could result in annual losses of about 400,000 jobs, 5.6 trillion won in income, 10.7 trillion won in real GDP, 5.5 trillion won in consumer spending, 1.8 trillion won in corporate spending, and 77,000 in number of enterprises.

Shortened working hours will reduce overall labor supply in the market, which will lead to a rise in wage unit and bring job losses, the institute said. Fewer jobs will affect overall production and weigh on GDP and investment, it said, adding that a drop in total wage income will affect consumption.

Pi-Touch Institute particularly noted in its report that the shorter work hours will lead to a loss of more than 200,000 skilled jobs. The number of skilled jobs involving non-repetitive work will drop by 235,000 on an annual basis, which is almost 1.5 times more than the drop in the number of non-skilled jobs.

The research institute advised the government to introduce a safety net for companies so that they are able to extend flexible workweek system by up one year as it is the case in other advanced countries to reduce burden.

The statutory workweek was universally reduced to 52 from 68 hours, but given two six-month grace periods due to strong protests from the business community that complained of the one-size-fit-all rigidity in work hours in the digital age where hour flexibility and concentration is needed. The government vowed to the change the related law to enable greater flextime before the grace period ends in March. A tripartite committee has failed to reach a consensus due to strong opposition from the unions in compromising with the new work hour rule.

By Kim Tae-joon and Lee Eun-joo

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