Korea is sometimes called a one-shot society. More correctly, it is a “high-stakes” society. Korean youth face a colossal tournament consisting of three rounds: advancement to a rigorous high school, a top college and then one of a few renowned corporations.

Winners take it all ― enjoying generous compensation and perks including public respect, a five-day workweek, paid holidays, free medical check-ups and maternity leave. The rest of society, notably the “office workers,” must put up with poor working conditions, poor welfare coverage and a lack of job security.

When preparing for college-admission tests, students take the differential in future benefits into consideration. They face the high stakes of getting it right and advancing to a prestigious initial job, or not. An integral part of the stakes is that, should the individual fail, every subsequent round will be over lower stakes. Scoring well empowers one to eventually compete for the best-perks career; scoring poorly restricts one to competing for mediocre pay jobs with no perks.

Public policy is to blame. The laissez-fair government strives to encourage effort in the employment market. At the same time, it strives to project an image of dedication to social causes, while keeping overall public and corporate finances intact. It has joined most international labor conventions and enacted a full list of equal-opportunities laws, but has them enforced only voluntarily, at the top. This suppresses working conditions for mainstream workers, without inflating perks and costs at the top.

Employment welfare and protections are mandated by the Labor Standards Act. However, monitoring of firms’ practices is poor, and enforcement is left to individual employers. Companies that do not compete for public contracts and do not care about their global reputation offer workers the fewest benefits they can get away with. Only top employers, with particular motives, comply with domestic and international labor standards.

Qualified jobs are also subject to higher occupation-specific standards, such as lengthier paid holidays, generous maternity leave or early retirement. Overall, welfare programs and protections are disproportionately better enforced and more generous in the highest-level jobs, are less generous in mainstream jobs, and don’t extend to temporary or part-time workers. Middle-of-the-pack firms take advantage of such loopholes, manipulating the employment status of dispensable workers, or firing them at the two-year mark to avoid paying for perks.

With high unemployment among recent graduates and high long-term unemployment, labor demand is not competitive. Employers can choose whom to hire and promote. Discrimination based on gender, appearance, social and financial status and other worker characteristics is rampant in all but the highest-level jobs. Punishment for violations of anti-discriminatory provisions is capped under the Equal Employment Opportunities Act. The National Human Rights Commission and the Ministry of Gender Equality and Family have the quasi-judicial authority to issue recommendations, but do not impose penalties. Aggrieved workers are not entitled to punitive damages and hence lack incentives to sue.

Essentially, government mediates disputes between firms and workers, rather than resolve them through courts. It asks firms to resolve labor disputes voluntarily on their own. Of course, such mediation is only possible for existing workers ― applicants lucky to be hired. Because of lacking legal protection for applicants, companies do not face responsibility toward them until employment contract is signed. And once they are hired, applicants have little incentive to blow the whistle, lest they be fired and black-listed in the industry. Anecdotal evidence of such communication among subsidiaries of leading chaebol, and between them, exists.

While companies are not liable for their mistreatment of applicants, applicants face a clear responsibility to their future employers. Lying during the hiring process, even in response to discriminatory questions, is a legitimate ground for future dismissal.

As a result of the high stakes in each of the three “life contests,” and the difference between individuals’ rights before and after they are hired, the incentives of prospective workers change over the years. Students start cramming in the second grade of middle school, relax in the first year of high school, cram exhaustively two years later for college admission tests, relax significantly as freshmen and sophomores, and focus on securing a good starting job in their latter years in college.

Fundamentally, students concentrate on advancing to college and to a decent initial job, not on raising their long-term productivity. Senior-year students undertake extensive tutoring at private institutes in subjects covered on standardized tests, even though few of them will use the knowledge in their career. The problem is systemic. High school instructors, under pressure from parents and from national rankings, adjust lesson plans to prepare students for tests. College instructors give slack to job-seeking seniors. Society accepts dieting and plastic surgeries as legitimate means for improving job applicants’ prospects.

Going forward, several legislative and administrative changes should occur to lessen the high stakes in education, direct students’ efforts more effectively and usher in more harmony in society. Working conditions must improve at the bottom, in smaller businesses, even at the expense of initial subsidies or low-interest loans.

Loopholes in labor standards should be closed. Better monitoring of firms’ conduct is a must. To enforce laws more effectively, caps on penalties for infringement should be lifted, and dispute resolution streamlined in independent courts. Equal opportunities should be extended to job seekers. Empowering agencies that oversee labor conditions to prosecute, and coordinating their efforts would help.

In education, secondary schools should be restrained from hijacking teaching agendas myopically. Colleges should be instructed to standardize their curricula, emphasizing students’ long-term skills and student guidance. Of course, educating parents about the realistic prospects of their children, and about the fostering of desirable skills in them wouldn’t hurt.

By Vladimir Hlasny

Vladimir Hlasny is an assistant professor of economics at Ewha Womans University. ― Ed.