The North Korean Human Rights and Kaesong Industrial Complex

Prof. Yang, Moon-Soo

University of North Korean Studies

Jay Lefkowitz, the U.S. Special Envoy for North Korean Human Rights who created a stir by bringing up concerns over exploitation of North Korean workers at the Kaesong Industrial Complex, is said to be planning to visit the complex in July.  His visit will surely trigger another round of debate over the issue of worker exploitation at the Kaesong Complex. 

Although Jay Lefkowitz is one of the key “neo-con” thinkers, his concerns about Kaesong Complex are not entirely without basis in facts.  However, it’s only half the story.  The other half represents a more accurate picture of Kaesong Complex.  To illustrate this, let’s take a look at the direct payment of workers’ and the level of wages themselves. 

Paying workers’ wages to the government, instead of direct payment to the workers, does create a problem with transparency.  As such, there is no way to know for sure how much the workers are actually receiving in wages.  However, we have to ask whether it is appropriate, in the context of this debate, to make an issue over the rights and wrongs of the current payment system itself.  Even in Shenzen, China, where the first ever economic free zone was established, it took three years for the system of direct payment to workers took hold.  Why the delay?

In a socialist nation, the government is wholly responsible for the welfare of the people.  Education, medicine, housing, food, and other essential items are provided by the government at no, or very low, cost, creating a huge burden on the government.  In return, the people work for national industries, fulfilling their end of the implicit social contract.  The story changes when individuals begin working for a foreign company.  Then those individuals are no longer contributing to the social welfare of the nation as a whole; and yet, they receive all the benefits that the government is bound to provide.  This is the justification for the national government to garnish a part of the wages earned by the individuals working for foreign companies.  Also, this gives the right for the government to get a return on the investment it made in the individual – through free food, housing, etc. – so that the individual could get the job in a foreign company. 

This is why China, in its early days of economic liberalization, operated a human resource management company to receive all the workers’ wages from foreign companies and redistribute them to the individuals, after garnishing a part for the government.  Despite this, the ILO didn’t lodge any protests, because it understood the particular nature and obligations of a socialist government. 

Following along the same logic, the North Korean government is said to be garnishing 30% of the wages before remitting the rest to the individual workers.  As such, we have to understand that North Korea’s socialist system of governance will create an inevitable delay before direct payments to workers become the norm.  In the case of Kaesong Complex, especially, the direct payment to workers system has already been agreed upon by North and South Korea, and they are just preparing the technical details to make implementation possible. 

Now, let’s tackle the issue of workers’ wages.  First of all, the wages paid to the workers at the Kaesong Complex is higher than in the rest of the North Korea.  The lowest wage at Kaesong is $50 US.  Take away 30% for the government, you will get paid $35.  Using the official North Korean currency exchange rate ($1 = W150), this becomes W5,250.  Relative to the average wage for North Korean workers at W3,000, this is not a small amount.  Further, when you add overtime and holiday payments, the average wage paid last year at Kaesong was $67 on average.  Take away the 30% tax, you still get about W7,000, making Kaesong wages double of that in the rest of the country.  Of course, this calculation assumes that all the wages except for the 30% tax are remitted to the individual worker in full. 

To enhance our understanding more, let’s observe the quality of life of the actual Kaesong workers before and after the start of their jobs.  For example, Company A at Kaesong Complex recently, in last May, retook the I.D. photos of their workers after 14 months.  Back in the company headquarters in South Korea, they couldn’t believe their eyes at how much the North Korean workers had changed.  When they first began their jobs, the North Korean workers’ faces were almost all dark and listless.  However, just after 2-3 months, their faces began to lighten while their bodies regained mass.  Young women experienced lightening of their skin discolorations and disappearance of sunspots and freckles.  Among the citizens of Kaesong City, it is said that you can tell, just by their appearances, who works at the Kaesong Complex and who doesn’t.  Company B also experienced similar changes among their North Korean workers. 

Even the workers’ physical stamina is getting better.  Company C admitted that they could only run the factory for 5.5 hours in the beginning.  However, the factories are now run for 6.5 hours after improvements in the workers’ physical conditions. 

Why the improvements?  First of all, the nature of food has changed.  Just take a look at the workers’ brownbag lunches.  In the beginning, the workers all had the same rise and side dishes.  Now, the selection of side dishes has varied, with some even bringing meat dishes.  Without an increase in wages, such food variety would be impossible.  In fact, grapevine confirms that Kaesong Complex workers are getting paid twice as much as non-Kaesong workers. 

Further, these workers are getting various services provided by the companies.  For lunch, the workers get soup, usually based on beef stock or other nutritious foods.  For regular rest periods at 3 in the afternoon, the workers also receive little snacks such as Chocolate Pie Cookies or boiled eggs. When they work in night, they receive noodle soup or full meal.  For South Korea or U.S. workers, such “services” couldn’t even be called as such.  However, we are talking about North Koreans, who had been suffering from chronic malnutrition because of breakdowns in government food distribution and non-payment of salaries.  From their point of view, their basic quality of life has improved greatly. 

The actual citizens of Kaesong City also welcome the Complex.  When asked, they replied, almost universally, that they were filled with hope that they would be able to make better lives for themselves and their families once they heard that the Complex would be established there. 

The reality is that there is a long list of people waiting to work at Kaesong Complex.  External lobbying for jobs are becoming fierce.  There is a even a new term called, “The Kaesong Dream” among the people.  If a young woman is employed at Kaesong Complex, it is said that she can feed a family of four.  In such light, it is obvious that their overall state of health and nutrition is improving.  What do you thing they would say when you tell them, “You are being exploited.” 

As Envoy Lefkowitz claims, is Kaesong Complex a place of workers’ exploitation and human rights abuses?  Or, is it a place of improving human rights through enhancing basic quality of life of the workers?  The answer is already clear.  ///