Introduction of a Comprehensive VT System: from the Enactment of the Vocational Training Act until the Enactment of the Act on Special

Measures for Vocational Training (1967-1974)

The unemployment rate was 8.4% in 1963 when the first Economically Active Population Survey was carried out, but fell to around 4% in the 1970s, indicating that the era of unlimited supply of unemployed labor was coming to an end²⁰⁾. With the successful accomplishment of the objectives of the First 5-Year Economic Development Plan (1962-1966), the employment structure began to change. To ensure the effective implementation of the Second 5-Year Economic Development Plan (1967-1971), the systematic development and supply of skilled manpower became an urgent requirement for the manufacturing industry. The government estimated the number of skilled workers required for this period (see <Table 4-2>). Among the 493,000 workers required for the 5-year period, 165,000 were estimated as being additionally required. Excluding vocational high school graduates, it was estimated that 96,000 workers had to be trained through VT.

<Table 4-2> Estimated Demand for Craftsmen

during the 2nd Five-Year Economic Development Plan (1967-71)

(Unit: persons in thousands)

1967 1968 1969 1970 1971 Total

Total demand 363.1 397.0 430.4 462.5 493.5 493.5

Additional annual demand 34.6 33.9 33.4 32.1 31.0 165.0

Vocational high school graduates 11.6 12.4 14.9 14.9 14.9 68.7

Demand for vocational trainees demand 23.0 21.5 18.5 17.2 16.1 96.3 Source: <Table I-2-4> in Ra and Kang (2011)

19) For more information, see Kim and Sung (2005), Na et al. (2011), and Ministry of Labor (2006).

20) The number of employed workers, which grew by 300,000 (about 3.5%) each year on average before 1970, grew by 460,000 (about 4.1%) in the mid-1970s. The unemployment rate fell and the employment structure improved.

The first attempt to enact laws concerning VT was made by the Economic Planning Board (the then Ministry of Development), which was in charge of establishing the economic development plans. Subsequently, it was decided that the Office of Labor, which was newly established within the Ministry of Health and Social Affairs, be put in charge of VT responsibilities. As such, responsibility for VT was transferred to the Office of Labor in April 1964. Based on the Technical Training Act (proposal) prepared by the Economic Planning Board, the Office of Labor drafted the Vocational Training Act in reference to the VT systems, VT expenses contribution systems, and the levy systems of the UK and France as well as the accredited VT system of Japan. Enactment of the law was delayed by numerous controversies in the review process. The Vocational Training Act was finally enacted in 1967, more than two years after its initial drafting by the Office of Labor in December 1964.

According to the Vocational Training Act, the purpose of VT was ‘to produce skilled workers required in manufacturing and other industries by conducting VT and qualifications tests for workers in order to promote status enhancement of workers and to contribute to the national economic development.’ Thus, the system was set out in such a way that it did not overlap with existing vocational education.

Outline of the Vocational Training Act included:

- Establishment of a comprehensive VT plan in consideration of the technical human resources supply plan

- Differentiation between public VT and in-plant VT

- Installation of Korea Vocational Training Management Corporation and implementation of public VT

- Autonomous implementation of accredited VT and government support thereof - Licensing system for VT instructors

The Ministry of Education introduced an amendment to the Enforcement Ordinance of the Promotion of Industrial Education Act that would allow the additional installation of vocational skills training centers in manufacturing businesses as well as in vocational high schools and vocational vocational high schools as previously stipulated. This was done without prior consultation with the Office of Labor and caused a conflict between the ministries.

The establishment of Korea Vocational Training Management Corporation as stipulated by this Act was objected to by the Economic Planning Board for reasons of low workload and budget constraints among other reasons. As a result, the Corporation could not be established within a year and the provision became merely nominal. Eventually, this provision was deleted during the 1969 amendment of the Vocational Training Act and Korea Vocational Training Management Corporation finally came into existence in 1982.

During the enactment process of the Vocational Training Act, it was discussed in the National Assembly that it would be better to promote in-plant training by granting subsidies to employers rather than making in-plant training mandatory. As a result, in-plant training was promoted by granting subsidies to employers who conducted in-plant training from 1967.

VT was largely divided into public VT and in-plant VT. The public VT project was implemented as part of the technical manpower development plan which was instructed by the President to the Cabinet on December 5, 1966. Although manufacturing facilities had been established by the end of the First 5-Year Economic Development Plan, some of the factories remained non-operational due to the lack of skilled workers. At the same time, many young people who decided not to continue their studies did not have the necessary skills for employment. VT included training programs conducted by the military, government agencies, local government authorities, and non-profit organizations

that were approved by the director of the Office of Labor²¹⁾. Promotion training, which was planned to produce the skilled manpower needed to increase exports and agricultural income, was conducted as short-term courses focusing on industrial products for the export market, especially handicraft products. Furthermore, training promotion centers, which were established to promote employment, trained the manpower required for the production of regional specialties and for the textile manufacturing industry.

In-plant VT included skilled worker training, supervisor training, manager training, and distance training, among others. Skilled worker training was conducted by employers through organized and systematic methods for the purpose of supplying the skilled workers required by industry and enhancing labor productivity. As a general rule, training costs were to be borne by employers. However, since employers had little understanding or interest in VT at that time, the government had to support in-plant VT efforts. Government support had a tangible effect on in-plant VT.

The number of enterprises conducting in-plant VT expanded from 16 in 1967 to 46 in 1968, 56 in 1969, 70 in 1970, and 81 in 1971, mostly involving large corporations. The number of trainees also increased from 4,000 in 1967 to over 13,500 in 1970 (see

<Table 4-3>). Government subsidies were the most important factor behind this growth.

However, with the increased demand for economic development funds, the in-plant training subsidy budget was reduced, and the number of in-plant trainees dropped significantly from 1972. All but a small number of employers stopped providing in-plant training. A number of problems emerged as many employers chose to hire workers who were already skilled rather than developing their own human resources. For instance, several shoe factories with 10,000 or more employees were established in the Busan area and took workers away from other companies. As a result, about 30% of all

workers resigned from their jobs every month in order to be hired in larger companies.

<Table 4-3> Number of Vocational Trainees by Type after Vocational Training Act (1967-70)

(Unit: persons)

Type Total 1967 1968 1969 1970

Total 86,688 10,738 20,180 25,212 30,558

In-plant training 33,922 3,890 8,022 8,527 13,483

- Craftsmen 27,111 3,140 5,918 6,503 11,550

- Technicians 6,811 750 2,104 2,024 1,933

Public vocational training 30,313 1,502 7,093 9,878 11,840

- Military facilities 3,721 1,278 853 777 813

- Government agencies 5,553 224 510 2,514 2,305

- Corporation 6,906 - 784 1,459 4,663

- Promotion training centers 13,597 - 4,946 4,961 3,690

- Rural vocational training centers 50 - - - 50

- Craftsmen(Central Vocational Training Center) 486 - - 167 319

Special training 7,483 2,346 1,965 2,766 406

Instructors 811 246 160 195 210

Managers 461 - 15 246 110

Supervisors 6,211 2,100 1,700 2,325 86

Correspondence training 14,970 3,000 3,100 4,041 4,829

Source: <Table 2-91> in Ministry of Labor (2006)

There was a desperate need to select and train supervisors with the qualifications required for rapid growth and technical reformation. Supervisor training was conducted for front-line supervisors within businesses to develop and enhance their abilities in working instructions, working methods, human relations and safety management. Supervisor training, which was developed as Training Within Industry (TWI) in the USA during World War II, required that a supervisor be selected from each business and go through technical training at the Central Institute of Vocational Training, and then go back to train other supervisors from within their businesses. Manager training was also conducted for

top-level managers to give them a better understanding of the importance of VT and to seek measures to ensure the efficiency of in-plant VT and to resolve the difficulties associated with VT. From 1968, manager training was conducted for CEOs. From 1971, manager training was also conducted for mid-level managers and directors of VT in four areas: Seoul, Busan, Daegu, and Gwangju.

From1968, distance training was conducted at the Central Institute of Vocational Training in order to provide theoretical knowledge of each business field to existing workers who could not participate in organized VT and workers employed in enterprises outside of the Seoul metropolitan area. The distance training courseware, which was designed to be run on a quarterly basis (four times a year) with a course time of about one hour per day, was distributed to the trainees, who were evaluated monthly. Those who completed the entire one-year course were eligible to take the comprehensive evaluation. Anyone passing the evaluation was exempted from the course examination for qualifications test level 3. Every year from 1968 to 1977, over 3000 people went through training in five key fields including machine welding, sheet metal, internal combustion engine, maintenance, and electricity. In all, a total of 30,828 people were given the opportunity to acquire new skills during this period.

One of the most urgent matters during the designing of the VT system was to secure a sufficient number of vocational training instructors. For this purpose, the Office of Labor launched the vocational training instructor licensing course in 1967. Since the instructors at the public training facilities had to be professionals equipped with both theoretical and practical abilities, the Office of Labor planned to produce such workers on a long-term basis. The Office of Labor installed the Central Institute of Vocational Training with the help of foreign aid and started producing 180 training instructors every year from 1972 in six departments, including casting and carpentry. The curricula

training instructors cultivated at the Central Institute of Vocational Training were assigned to a number of newly established VT institutes in the mid and late 1970s, ensuring an adequate supply of instructors.

While focusing on industrialization, the Korean government also endeavored to secure a sufficient number of public training facilities in the 1960s. However, the government was very limited in the undertaking of the VT project due to the financial burden and the absence of technical knowledge. As a result, the government had to rely on help from international organizations and developed nations to establish public training facilities within Korea.

At the time of the enactment of the Vocational Training Act, regarding training of vocational training instructors and the development of course materials as top priorities, the government successfully received US$2.5 million in aid from the United Nations Development Programme (UNDP) and the International Labour Organization (ILO). The Central Institute of Vocational Training, Handok Busan Vocational Training Center, Daejeon Vocational Training Center, Hanbaek Changwon Vocational Training Center, and others were established with the help of international cooperation agencies and industrialized nations such as Germany, Japan, and Belgium. Jeongsu Vocational Training Center was established with the support of the USA. An institute of agricultural vocational training was established in every metropolitan city and province with the support of international cooperation agencies and contributed to the training of the skilled workers required for rural development during the Second 5-Year Economic Development Plan in the late 1960s. Construction costs were borne by local government authorities, while equipment and technical support was given by the United Nations Children’s Fund (UNICEF), training costs were funded by the UNDP, and professional human resources were provided by the ILO. As grant-type aid alone was insufficient to support the construction of training centers, the government secured loans from the

Asian Development Bank (ADB) (US $ 3.7 million) and the International Bank for Reconstruction and Development (IBRD) (US $ 37.8 million). Fifteen training centers were established thanks to these two loans. The advisor service fees and cost of overseas training for employees in the IBRD development project were substituted with grant-type international cooperation projects from second countries and did not have to be paid from the loan. In particular, the IBRD development project was implemented as a Korea-Germany technological cooperation project (grant-type) and training facilities were installed under the meticulous preparation and technical support of German advisors and contributed significantly to the development of Korea’s VT system.

The Vocational Training Act was amended in 1973 to support the execution of the Third 5-Year Economic Development Plan. The VT system was supplemented and reorganized by laying new regulations concerning the types of VT, the training contract system, compulsory employment of those completing VT, and the five levels of qualifications tests.

Key content of the Act included:

- Dividing VT into public VT and private VT based on whether the training is provided by the public sector or the private sector, instead of the previous categorization into public VT and in-plant VT

- Installing the VT expenses contribution system based on the principle of payment by beneficiary, instead of the existing VT subsidy system

- New regulations concerning the establishment of Korea Vocational Training Management Corporation

- Prescribing the occupation system of craftsmen for certain business types and compulsory employment of craftsmen of certain types to ensure their preferential treatment

completing training and tax exemption on VT investments as a means to prevent scouts and protect employers

- Prescribing the training contract system that regulates the rights and obligations of training providers and trainees

4. Implementation of the Mandatory VT system: from the Enactment of the