Ways out of Dualism? the Politics of LM Reform in Japan and South Korea

Liberalization processes often forced industrialised countries to undergo several reforms of their labour markets (Streeck and Thelen 2005, Fleckenstein et al. 2011): East Asian countries are no exception to this (Dore 2000, Chan and Ngok 2011, Lee 2016). This study aims to describe how the traditionally ‘frozen’ industry-based coordinated market economies of South Korea and Japan (Soskice and Hall 2001, Amable 2003) coped with this challenge. By using a most-similar-systems research design (Ragin 2014), we highlight how political features such as the constitutional and partisan distribution of veto power are more useful in interpreting recent labour market reforms in South Korea and Japan, than structural elements such as globalization and industrialization. Our comparison is going to be focused on recent labour market reforms from the conservative Abe government in Japan and the centre-left administration of Moon in South Korea. We argue that they are both showing signs of a path shift in their recent labour market reforms (2016 in Japan, 2017 in South Korea). This might be the result of a gradual change that took place since from the neoliberal reforms of the 1990s, in the face of a worsening dualization of their respective labour markets. However, concerns exist over difficult implementation of such policies, as it often happens for gradual institutional change (Streeck and Thelen 2005). In Japan, although a stable majority in the Diet has been secured for a long time, de-regulatory and re-regulatory reforms are only gradually taking place, the latter being ostracized from organized labour and the white-collar class from the Komeito and the politically independent parties. In Korea, notwithstanding a strong presidential system, highly fragmented labour unions, several strands of opposition power in the general assembly, and the conservative stance of most of these political actors, are creating strains in reforming the labour market.