The Key to Addressing Labor Shortages in South Korea

According to Nikkei Asia, South Korea's urgent need to hire foreign workers is partly due to the country's declining population, which is seriously threatening its growth prospects. Some experts predict that, thanks to their large populations, Indonesia and Nigeria will surpass South Korea in economic size by 2050, pushing the country out of the world’s top 15 economies. Despite the hundreds of billions of dollars South Korea has spent trying to reverse this trend, the average number of children a South Korean woman gives birth to in her lifetime hit a record low of 0.78 in 2022. In Seoul, this figure was even lower, at just 0.59.

In South Korea, a handful of conglomerates dominate the economy, while 99% of domestic companies are relatively small. With low wages and demanding jobs, these companies fail to attract young South Korean workers. As a result, industries such as agriculture, livestock, fisheries, and manufacturing struggle to recruit employees.

In response, the South Korean government has sought to bring in more foreign workers to compensate for the domestic labor shortage. In 2004, South Korea launched a program to accept low-skilled foreign workers, in which the government oversees the entire recruitment process—from hiring and job placement to ensuring workers return home when their employment term ends. This program covers various sectors, including manufacturing, construction, agriculture, livestock, services, and fisheries.

According to the South Korean government, in 1990, around 49,000 foreign workers resided in the country long-term. By 2019, the number of foreigners, including those staying for less than 90 days, had surged to over 2.5 million, making up 4.9% of South Korea’s total population of approximately 51 million. About 40% of these foreigners were Chinese, followed by Vietnamese as the second-largest group, with Thais ranking third. In an effort to open its labor market, South Korea has implemented various measures to help foreign workers gain permanent residency.

Today, foreign workers can legally reside in South Korea or become permanent residents through marriage to a South Korean citizen. The number of marriages between foreign workers and South Koreans has risen sharply since 2000. Currently, one in ten marriages in the country involves a foreign spouse.

Professor Ikumi Haruki of Seigakuin University (Japan), the author of a book on South Korea’s immigration policies, stated that the South Korean government’s extensive support policies could be key to increasing the number of foreign workers obtaining permanent residency or making South Korea their long-term home. To facilitate foreign workers’ integration, the country has implemented various programs, such as language education and counseling services. Support centers have been established nationwide, offering Korean language lessons through textbooks. According to Haruki, South Korea currently provides free language courses at 319 locations across the country.

However, the government’s efforts to attract foreign workers face challenges, as many South Koreans are dissatisfied with the large budget allocated to supporting immigrants and the children of mixed-nationality parents. Additionally, despite earning relatively high wages, foreign workers often endure long working hours and face discrimination in the workplace.

South Korea remains an attractive work destination for young people from Southeast Asia, partly due to their familiarity with Korean companies and products. The global appeal of K-pop and Korean dramas has also contributed to drawing young workers to the country. While the policy still has shortcomings, observers believe South Korea’s approach to attracting foreign labor provides valuable lessons on mitigating the economic impact of a declining birth rate.