A rapidly aging population is a cause of great concern for South Korea already, but a report released Monday gave another reason to worry about: It would hurt the locomotive of the local economy -- manufacturing.
According to the Seoul-based Korea Economic Research Institute, the sector will suffer a severe blow from the graying of the workforce. Its analysis of the demographic trends of the manufacturing workforce over the last 10 years shows that the proportion of workers in their 50s and above remarkably grew from 15.7 percent in 2010 to 30.1 percent in 2020.
In contrast, the percentage of workers in their 30s declined from 35.1 percent to 27.8 percent during the same period, while that of workers aged between 15 and 29 dropped from 21.6 percent to 15.2 percent.
“The aging in the manufacturing workforce has reached a serious level, with the percentage of workers aged 50 or above more than doubling for the last 10 years,” the institute commented in the report.
Compared to other major economies like the United States and Japan, Korea’s manufacturing industry is undergoing aging at a faster rate, the institute noted.
The average age of workers in the manufacturing sector stood at 42.5 years old in 2020, up 3.3 years from 2011.
The US average inched up 0.3 year, while the figure for Japan went up 1.2 years.
The increase in the average age of Korean workers was 11.3 times faster than that of the US, and 2.8 times that of Japan during the period between 2011 and 2020, the report showed.
“If the trend continues, the average age of Korean manufacturing workers, 44.9 by the time around 2026, would exceed the averages of both countries, 44.6 for the US and 43.6 for Japan,” it said.
As for major causes of the quick aging in the Korean manufacturing sector, KERI pointed out stringent regulations.
“As regular workers are overly protected due to strict regulations while contracting new investments and employment, it was more difficult for younger workers to enter the manufacturing industry,” the report said.
Since the pace of wage growth for workers over 50 is much faster than that of workers in their 30s, companies would also have to take on a greater burden if the aging trend continues, it added.
By Song Su-hyun (firstname.lastname@example.org