중앙데일리

The tears and hopes of defectors

The adjustment by North Koreans to a market economy is the weakest link in our unification plan.

Nov 07,2014

After first meeting a North Korean defector, I could not sleep for several days. She was composed as she told me her husband had been shot and killed and her eldest daughter caught and sent back. Then she hung her head and cried.

A defector whom I met while researching at Hanawon, the re-education center for the defectors, spoke to her daughter who settled in the South first on the phone telling her, “I love you.”

Her voice was shaky out of anticipation for the reunion, as well as the prospect of freedom and concerns over how to make living from then on. North Korean defectors cross the border and come to South Korea for freedom, but living as a defector here is not easy.

According to the Korea Hana Foundation’s 2013 report, unemployment rate among North Korean defectors is 9.7 percent - 3.5 times that of South Korean residents. The employment rate for defectors is 51.4 percent, which means about half of those who are working age are without jobs.

The average monthly household income for defectors who are waged workers is 1.41 million won ($1,300), less than half that for South Korean residents. As a result, 76 percent of defectors consider themselves to belong to the low- or lower-middle classes.

North Korean defectors’ adjustment to the South is challenging due to the labor market structure and welfare system, as well as the productivity gap between North and South Korea. Considering the fact that the monthly average wage of a Chinese worker is $700, the wage level corresponding to the productivity of defectors would be even lower. But the minimum living subsidies for two-person and four-person households paid in cash are 830,000 won and 1.32 million won, respectively, and the defectors with dependent family members are better off taking the benefit.

Moreover, the average monthly pay for an irregular South Korean employee is 1.45 million won, and employers would rather pay to hire a South Korean applicant over a defector. As a result, nearly half of all defectors are subsidies recipients.

What’s more worrisome is that the age group that shows the biggest gap between South Koreans and defectors, in terms of economic participation, is the group between age 30 and 40 - the main work force. If they fail to participate in the labor market, they would inevitably incur long-term welfare costs.

Another factor that makes defectors’ adjustment so challenging is the lack of understanding of South Korean social norms and its market economy. According to my research project with Seoul National University professor Lee Suk-bae and Choi Seung-ju and Seogang University professor Lee Jung-min, defectors enrolled at South Korean universities are 26 percent less competitive and have 18 percent less support for the private ownership of their production means compared to South Korean college students.

Defectors who have lived in the South for an average of five years and are studying at South Korean colleges still have a long way to come. Additionally, companies that hire North Korean defectors often say that the defectors find it greatly disappointing that wages are doled out according to seniority and performance.

If the number of defectors remains at the current level (27,000) and doesn’t increase drastically, the South Korean economy can continue to support them by providing welfare benefits. However, if the defectors grow to several hundreds of thousands, it would incur trillions of won in welfare costs. If reunification is suddenly realized, and the South Korean welfare system is applied to the North Korean region, the cost would be astronomical.

The adjustment by North Koreans to a market economy is the weakest link in our unification plan. The unification jackpot theory is based on the growth model that combines South Korean capital and technology with North Korean labor. However, if the majority of North Korean residents don’t work, a jackpot cannot happen. Instead, reunification would be disastrous. Therefore, encouraging and helping North Korean residents’ prompt and smooth transition to a market economy is a crucial policy task.

In that sense, defectors are a god-send for Korean society. Lacking the economic power that Germany had, Korea has been given an opportunity to practice and prepare for reunification. However, we’ve wasted that chance until now. One serious problem is that we still don’t have a plan to drastically boost defectors’ productivity, and there has been no research conducted on this subject.

Government contracts that demand immediate outcomes from scholars would not produce adequate or creative outcomes, and companies - which would enjoy the benefits of unification most - are indifferent. However, without research, we cannot hope to draft an effective policy for defectors’ assimilation, just as the promotion of condom use reduced HIV transmission by 60 to 70 percent in Africa.

Without resolving this problem, we cannot help the defectors struggling to adjust to South Korean society. Can we make North Korean residents yearn for reunification with the South? Can we reform the labor market and welfare system to be more unification-friendly? These are the questions that still keep me up at night.

Translation by the Korea JoongAng Daily staff JoongAng Ilbo, Nov. 6, Page 35


The author is an economics professor at Seoul National University.

Kim Byung-yeon







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