During the 1990s, South Korean workers' salaries rose an average 15 per cent per year, but their productivity tumbled to half that in the United States. The result was flabby, uncompetitive industries that got their comeuppance in the shape of the 1997 currency crisis.
Two years on, Korea has a broadly pro-labour government looking to cajole a volatile union movement into a new deal with employers.
It has the advantage of a rebounding economy, but must overcome decades of deeply ingrained restrictive practices and a workforce still wedded to the idea of a job-for-life.
Capturing the spirit of national purpose in the aftermath of the currency crisis, President Kim Dae-jung's new government introduced a raft of legislation that sought to include umbrella union groups in the collective bargaining body.
That effort was only partially successful, with the largest unions boycotting the tripartite government-unions-employer arrangement. The problem is that something of a phoney calm reigns across Korea's industrial heartlands.
Fears of mass lay-offs at the largest industries have yet to materialise. Unemployment remains resolutely at 6 per cent, with groups such as Hyundai backing away from planned swingeing job cuts under the threat of strike action.
