(FORTUNE Magazine) – Now that Hyundai, South Korea's second-largest industrial group, has agreed to recognize an independent labor union, the question becomes: Will democracy slow down the Korean economic machine? The answer is probably, but not much. The government, fresh from its stunning decision to hold direct elections, played the unusual role of peacemaker between angry Hyundai workers and the conglomerate that had locked out 20,000 demonstrators. The surprise deal raised hopes for a quick end to walkouts that had spread from heavy industries to electronics companies and even taxi drivers. Up to now the government had barred strikes and stifled labor unions in its pursuit of economic growth. With an average manufacturing wage of $1.75 an hour, lower than that of those other industrializing Asian tigers -- Taiwan, Hong Kong, and Singapore -- Korea has become the world's leading exporter of ships, shoes, and microwave ovens. If companies grant pay increases of 10% to 15%, the Korea Development Institute, a highly regarded government research outfit in Seoul, figures that the economy would grow only 5.5% in the second half of the year, vs. 15% in the first six months of 1987. But other experts call the forecast unnecessarily gloomy. John T. Bennett, president of the Korea Economic Institute, a Washington-based research firm, thinks 10% growth in the second half is not out of the question. ''The stimulus of bigger wages and victory might bring those demonstrators back all fired up,'' he says. ''If a guy thinks he's going to get a bigger hunk of the pie, he wants a bigger pie.''