Calls for more  migrant workers clash with concerns on economic impact


In the wee hours of a freezing day in January, hundreds of people, mostly middle-aged men, were lining up in front of a branch office of the Employment and Labor Ministry in Uijeongbu north of Seoul.

Some of them had stayed in a makeshift tent for three days to keep their place in the line.

The people, who run small manufacturing companies, were waiting to receive permits to employ a limited number of foreign workers in their factories, handed out on a first-come, first-served basis.

Similar scenes were observed at most of the 51 employment centers operated by the ministry across the country.

Securing migrant laborers has become crucial for small manufacturers shunned by young native-born workers who prefer jobs in big companies with better prospects.

Their sense of urgency has been amplified as a large number of foreign workers are leaving the country this year as their employment period expires.

According to the Employment and Labor Ministry, 67,111 expatriates are set to return to their homeland in 2012 after working four years and 10 months, the maximum period permitted under the current system. Their departure comes on top of 33,938 and 5,243 migrant workers who left the country in 2011 and 2010, respectively.

Leaving small businesses feeling further pinched, the ministry has decelerated the growth of immigrants under the employment permit system adopted in 2004. The number of new foreign workers available for small manufacturers fell sharply from 60,800 in 2008 to 13,000 in 2009 before gradually increasing to 28,100 in 2010, 40,000 in 2011 and 49,000 this year, according to statistics from the Korea Federation of Small and Medium Business.

Small manufacturers have called for policymakers to increase the number of expatriate workers and extend their working period to ease the shortage of manpower.

“Without the foreign workforce, many small businesses would have to move their production abroad or shut down,” said Ryu Jae-bum, head of the foreign workers services team at the federation.

“We should now recognize them as an essential pillar of our industrial structure,” he said.

This year’s quota of 49,000 is just half the more than 98,000 migrant workers estimated to be needed by small businesses, according to Ryu.

Growing presence

Reliance on foreign workers has also deepened in construction, fisheries, farming and the hospitality industry, with about 8,000 expatriates available for the sectors this year, far below demand.

The proportion of expatriates at workplaces hiring at least one migrant worker increased from 5.13 percent in 2005 to 20 percent last year, according to figures from the Korea Employment Information Service.

In some places of work like large restaurants, it is no longer unusual for local workers to be in the minority.

Government officials, however, have remained cautious about opening the door wider for expatriate laborers at a time when they are struggling to boost the local employment rate ― for youths in particular.

“(Increasing the foreign labor quota) is a matter that should be reviewed cautiously in consideration of domestic and international economic situations and (local) employment conditions,” said Employment and Labor Minister Lee Chae-pil in a meeting with small business owners in September.

Ministry officials have worked out measures to help ease the labor shortage while keeping intact the main framework of the policy crafted toward regulating labor imports while preventing individual workers from staying too long in what the officials believe should be a temporary home.

Under a revised law which takes effect in July, local employers will be allowed to reemploy selected foreign workers who have completed the maximum hiring period on their reentry after staying for three months in their home country.

Migrant workers will also be permitted to return to Korea after six months if they pass a special Korean language test.

Small businesses, however, have complained that such measures are still insufficient to fill vacancies.

There have been differing views on whether and to what extent expatriate laborers take employment opportunities from local citizens ― especially young people.

Some critics say letting unskilled foreign workers occupy a larger chunk of low-wage jobs would deprive less privileged Koreans of easily accessible sources of income over the long term.

A more cautious approach is required in importing unskilled foreign labor, if the country is to secure room to buttress the employment rate of young people, married women and aging people, said Yu Kyung-joon, a senior research fellow at the Korea Development Institute, a state-funded think tank in Seoul.

Government figures show nearly 92 percent of migrant laborers here are doing manual work, compared to an average 54 percent in the 34-member Organization for Economic Cooperation and Development.

Critics also say the inflow of low-paid expatriates serves to pull down the wages for native-born workers, exacerbating the unequal distribution of income in Korean society, which has already seen a deepening polarization between rich and poor.

Seol Dong-hoon, professor of sociology at Chonbuk National University, noted local workers are usually put at a disadvantage against foreign laborers in competing to get less skilled jobs as their wage demands are higher.

“If an area becomes open to low-paid expatriates, it would be shunned by domestic workers and thus continue to be filled with migrants,” he said.

Some even express concerns the growing influx of migrant workers, coupled with the increasing number of married immigrants, might erode social integration, citing cases of some western European nations having difficulty dealing with growing disgruntlement from alienated expatriate communities in the wake of the global economic crisis.

Substitutive relationship?

But business officials argue there is no substitutive relationship between foreign and local workers in Korean labor markets.

“The truth is that few Korean youths are looking for jobs at small manufacturing firms, which they deem dirty and dangerous,” said Ryu at the federation of small business.

A dyer in his 50s, who wanted to give just his family name Lee, said it was almost impossible to recruit Korean workers, complaining that his son, a college graduate, does not want to inherit his business.

In a survey of about 300 small businesses conducted by the Korea Chamber of Commerce and Industry in January, more than 90 percent said they had hired expatriates because they were unable to recruit Korean workers, with only 11.9 percent employing them because of cheaper wages.

Seven out of 10 respondents said employing foreign workers would have little effect on jobs for local laborers while slightly over 15 percent said the impact would be significant.

Ryu urged the government to carry out policies on labor imports in a more flexible way based on the assessment of long-term corporate requirements.

Some figures show Korean youths shunning jobs at small manufacturers because they are overqualified and/or unwilling to take up hard work.

With small businesses frustrated at a shortage of native-born laborers, more than 40,000 high school graduates applied for 600 office jobs offered at subsidiaries of Samsung Group, the nation’s largest conglomerate, early this year.

The number of youths who are unemployed or have given up looking for jobs increased from about 990,000 in 2003 to more than 1.1 million last year, according to a study by the LG Economic Research Institute. The total number of people decreased from 10.3 million to 9.5 million over the same period.

The youth jobless rate came to 8.3 percent in March, far above the total unemployment rate at 3.7 percent.

Only half of college graduates, whose average number has stood at about 500,000 in recent years, have landed jobs in a country where more than seven out of 10 high school graduates enter university.

Yoon Young-soon, director of foreign workforce policy at the Employment and Labor Ministry, said arguments by small businesses “cannot be totally dismissed,” but it would also miss the point to claim there was no substitutive relationship between migrant and domestic workers.

“It is undesirable to set the foreign labor quota based merely on demands from individual workplaces,” she said, adding the government will “take into consideration the whole picture” in deciding whether to increase it next year.

Korea began importing foreign labor in 1993 when it introduced the industrial trainee system, which was criticized for many loopholes and reinvented into the employment permit scheme in 2004. Under the current system, 15 countries, including China, Vietnam, the Philippines, Indonesia, Thailand, Uzbekistan, Mongolia and Sri Lanka, send workers, who are allowed to work for an additional 22 months after finishing the initial employment period of three years.

The measure has led to a steep increase in the expatriate population in Korea.

The number of foreign nationals here rose from about 500,000 in the early 2000s to around 1.39 million last year, accounting for 2.9 percent of the total population, according to figures from the Justice Ministry.

About 714,000 of them were employed, with roughly 70 percent, or some 488,000, being unskilled laborers. The number of professionals stood at around 44,000.

More than 167,000 were presumed to be working illegally.

Migrant laborers account for 3 percent of the total employees and 4.4 percent of waged workers, according to statistics from the Employment and Labor Ministry.

Need for talent

While slowing down or curbing the increase in unskilled expatriates, some experts here note, Korea should be providing a variety of incentives to attract more foreign professionals with world-class expertise essential for further boosting its competitiveness in global markets.

Among their proposals is a measure to exempt them from income taxes as some advanced countries have already done.

They also advise policymakers to work out ways of nurturing foreign students who are enrolled in local universities into skilled workforce to be employed by Korean companies.

Korea still has a lower proportion of migrant workers compared to other developed countries.

According to OECD data, Korea filled only 2.3 percent of domestic jobs with foreign workers in 2009. The corresponding figures amounted to 21.9 percent in Switzerland, 11.2 percent in Australia, 9.7 percent in Norway, 7.3 percent in Britain and 5.4 percent in France. Japan, which has a more homogeneous society like Korea, was bottom with a meager 0.3 percent.

By Kim Kyung-ho (khkim@heraldcorp.com)