South Korea risks undermining its export competitiveness as the Lee Jae-myung administration pushes ahead with labor reforms that increase costs, shorten working hours and extend the retirement age without guaranteed productivity gains.

While the stated objective is to raise living standards and long-term efficiency, the transition imposes structural pressures that large firms can navigate but small and medium-sized enterprises (SMEs) will likely struggle to adhere to.

PRICING LABOR TIME

The government’s national agenda lists 123 policy tasks across five pillars that include politics, economy, balanced growth, society and foreign affairs. Within the fourth pillar, the program targets working hours and