Korea Employers Federation (KEF) Chairman Sohn Kyung-shik has urged the government to make 2026 a "golden time" for Korea's economic revival, emphasizing the need for labor market deregulation and support for advanced industries.
"While our economy this year is expected to improve somewhat compared to last year, formidable challenges still stand in the way," Sohn said in his New Year's address Wednesday. "The global economic slowdown, changes in trade relations with the United States, geopolitical risks, intensifying competition in advanced technologies, and China's rapid catch-up are all heightening concerns."
"I hope this year becomes a golden time for our economy to overcome the crisis, achieve a great transformation, and make a new leap forward," he added. "To survive global competition, it is essential to create a dynamic business environment that can encourage corporate innovation and the spirit of challenge."
Sohn identified labor market deregulation as the top priority. "Our rigid labor market makes it difficult to respond swiftly to industrial structural changes and has lower productivity than competitor nations," he said, recommending a shift to flexible working hours and production methods tailored to the characteristics of each job category.
For research and development in advanced industries in particular, he stressed the need to "create an environment where workers can fully demonstrate their capabilities without being constrained by working hour regulations."
The KEF chairman also cited wage system reform and modernization of labor-management relations as key tasks. "To improve productivity and secure talent, we must transform the seniority-based wage system into a fair compensation structure that reflects job value and performance," Sohn said. "Only by increasing labor market flexibility can we find solutions to the retirement age extension issue that can coexist with youth employment."
On labor-management relations, he said, "It is important for labor and management to comply with laws and principles and engage in dialogue and compromise at industrial sites." He argued that "we must restore balance in labor-management relations by guaranteeing companies' right to respond rationally to unions, as in competitor countries."
Sohn expressed concern over the revised Trade Union Act, commonly known as the "Yellow Envelope Law," set to take effect in March. "Confusion at industrial sites is expected due to legal ambiguities such as the expanded scope of employers and the broadened concept of labor disputes," he said. "I urge the government and the National Assembly to do their utmost to minimize side effects by fully reflecting the positions of businesses."
The chairman also called for bold economic policies to promote investment in advanced fields such as artificial intelligence, semiconductors, and robotics. These include eliminating unnecessary regulations and improving the tax system—including corporate and inheritance taxes—to levels comparable to competitor nations. Through these measures, he argued, the government should strengthen support for companies driving innovation in advanced technologies.
"Our economy has achieved remarkable development by overcoming numerous crises," Sohn said. "The indomitable entrepreneurial spirit of business leaders will shine again this year, leading our economy to a new leap forward."
"KEF will focus all its efforts on creating a dynamic business environment so that our companies can engage in management activities with confidence in the future," he added. "We will strengthen cooperation with the labor community and actively participate in social dialogue, working tirelessly for the stability of labor-management relations and economic revitalization."
