|Kim Sang-kyung, CEO of Korea International Finance Institute / Korea Times photo by Shim Hyun-chul|
Economy needs strong laws to boost workplace gender equality
By Park Hyong-ki
The high glass ceiling especially in finance poses a serious problem to the economy, said Kim Sang-kyung, chairwoman and chief executive of the Korea International Finance Institute (KIFI), a private institute that provides financial education and licenses.
If the government does not address and resolve the rising gender inequality in the labor force through legislative measures like Europe, the United States and Japan are doing, Korea's growth will fall further into deeper turmoil.
"Japan used to fall behind Korea in terms of female labor force participation measured by the OECD. Now, it has exceeded this country due to Prime Minister Shinzo Abe's 'womenomics' policy," Kim said in an interview with The Korea Times at her office in Seoul.
"Korea is doing nothing to promote gender equality in the public and private sectors. Only Cheong Wa Dae is appointing female ministers to have them account for 30 percent of all ministers."
She added state-run companies are not in the game, and if they are not moving, why should private companies?
The country's female labor force participation rate stood at 59 percent in 2017, below the OECD average of 64 percent. Japan had 69.4 percent.
Abe's womenomics, part of Abenomics, seeks to get more women into the workforce, as the prime minister said they will help Japan usher in "a new era of success" for the economy.
Under this vision, the Japanese government has made it mandatory for all listed companies to have female executives account for 30 percent of the total top management by 2020 ― no exceptions and no excuses.
It is "nudging" them to follow this rule through Japan's Government Pension Investment Fund (GPIF), which now only invests in companies that raise the gender equality bar, as well as promoting sustainable, transparent governance.
The GPIF has assets worth $1.4 trillion under its management, compared to the National Pension Service's (NPS) $530 billion.
"Japan's GPIF has certainly got the private sector moving to increase its number of female employees and executives to attract the GPIF's long-term investment. This has been highly effective in Japan's capitalist system," Kim said.
"I was told the GPIF wanted to recommend the NPS to do something similar. But the pension here ignored it and did not respond."
Thanks to Japan's policy, the country's female executive ratio stands at nearly 7 percent, while Korea has 2.1 percent, she noted, citing data from U.S.-based Women Corporate Directors.
Conglomerate owners' daughters, including Korean Air's Cho Hyun-ah and Hyun-min, take up a large portion of that 2.1 percent, Kim said, noting this country's dark future for hard-working middle-income mothers.
Kim, who is also the chair of the Korea Network of Women in Finance, hosted an annual forum recently on gender equality, inviting officials from Japan, including the GPIF, to present their cases.
European countries such as Norway and Sweden have also enacted laws to boost gender equality. In the beginning, Norway, for instance, forcibly delisted companies that failed to abide by its rules promoting women in the workforce, Kim noted.
"The International Monetary Fund has also warned Korea about this issue for some time, advising it do more to promote gender equality for the sake of the economy that is losing momentum. But this country has been nonresponsive, making its glass ceiling thicker," she said.
IMF Managing Director Christine Lagarde mentioned last year that if Korea can increase its female labor participation rate through a sustainable social framework toward the level of men, its growth can jump 1 percentage point.
While meeting with students of Ewha Womans University for discussions, she was "shocked" to hear that seven out of 10 do not want to get married and have children because that would end their career.
She has been said to have expressed Korea's anti-marriage, anti-child and inequality culture as "collective suicide" for the economy.
Kim said her remarks also pertain to men and women not equally and responsibly sharing the burden of childrearing, adding only the mothers are forced to take care of their children.
This is because of deeply rooted Confucian values, she said.
She said the country should look to Sweden, which has a law enabling both men and women take equal days of parental leave. Giving only the women certain or more period of time to leave work for their children would not be fair, and would only increase burden on working mothers.
"But we really haven't done or tried to create a sustainable ecosystem or a virtuous cycle that can help boost the value of family, work and equality," she said.
In finance, the state-run Korea Development Bank is making "noticeable" efforts to improve gender equality especially after Lee Dong-gull's appointment as chief executive in 2017, Kim noted, while other banks do not seem to care about it.
The participation rate of the female labor force in their 20s and 30s in banking is 50 percent, but it reduces to 17 percent for 40-somethings, and near zero for 50-somethings, Kim noted.
"This means they are not doing anything either from the top down or from bottom up to create a pipeline through which female employees can reach the top once they start working when they are in their 20s," Kim said.
"The glass is just getting thicker and higher."