South Korea is known for its strong labour movement. Over the past two decades, the country has seen numerous strikes and disputes, often resulting in violent clashes between workers and riot police.
Now, with former labour-dispute arbitrator Roh Moo-hyun as president, it seems the movement's power has increased. Throughout the past week, thousands of independent truck drivers stopped work, demanding higher fees and nearly paralysing the transport of cargo in the world's 11th-largest economy.
Pusan and Kwangyang ports were stacked with containers, leaving nowhere for ships to unload.
Technically speaking, the truckers are not union members and their action was not a strike. They are independent subcontractors who receive and execute orders from larger trucking companies. However, with a limited supply of orders and an increase in the number of truckers, there has been a steady decline in income. The drivers claim fees do not even cover their basic costs.
The two sides were on collision course until a deal was struck yesterday. Thousands of riot police had been deployed in Pusan to end the strike forcefully, while soldiers were mobilised to move cargo containers at Pusan and other ports. Several leaders of the Korea Cargo Transport Workers Union were being sought by police for initiating illegal labour action.
The truckers will go back to work after the government agreed to a cut in income and oil taxes, as well as almost all of the truckers' other demands.
In South Korea, the problem is that labour unions have become too demanding. While inflation runs at a low 3 to 4 per cent a year, unions usually ask for wage rises of more than 10 per cent - and their productivity increases fall far below the wage increases.