[VIEWPOINT]Guest workers and the economy

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[VIEWPOINT]Guest workers and the economy

The government recently announced that an additional 50,000 foreign workers would be brought into the country to assist with the competitiveness of small and medium industries. Already there are estimates that approximately 200,000 foreign workers are working in small and medium manufacturing facilities across the country, working for relatively low wages. These manufacturers have difficulty finding Koreans to fill these jobs for wages that permit them to remain competitive with factories in China, Indonesia, Thailand and other low-wage countries.

The intent behind this policy is to permit these companies to remain in business, and in many ways this is a sign of Korea's transition from a developing to an advanced nation. Companies in many similarly advanced countries use unskilled, low-paid workers to stay competitive and to fill jobs that residents refuse to take. While many college graduates find it difficult to find jobs, they are not interested in wasting their education on these low-paying dead-end jobs. But for the foreign workers, the jobs are a chance to earn much higher wages than they could get in their home countries and that permit them to support themselves and their families.

There is a certain tragedy as well in this policy. The import of foreign workers only serves to delay the inevitable; the industries sooner or later must relocate to other countries. In the long term, these jobs will not remain in Korea; Korean workers are simply not willing to work in bad conditions for low wages with few opportunities for advancement. Some of these companies will limp along here only to find that ultimately their production will be replaced by that of companies in China and elsewhere who will not only stay competitive, but be able to improve the quality of their products by a better motivated, long-term work force in their home countries.

Recent press reports have also outlined some of the social problems that a few of these low-skilled workers bring to Korea, such as crime and drug abuse. Many of the guest workers are here illegally, so they have no access to health care and other social support systems, creating even more problems.

Ultimately, most of these companies should not rely on the import of foreign workers to stay in business; they should relocate their manufacturing to factories outside of Korea where they can take advantage of these low-wage workers, but at the same time maintain their customer base and ultimately their profitability. Many athletic shoe manufacturers have had great success and stayed competitive by moving production offshore, but leaving the high-paying jobs, such as those involving product design, finance and marketing, in Korea.

Korea could be better served in the long run by a more balanced immigration policy and better plans by companies for using foreign labor.

Given the openness of Korea's economy, it must now compete internationally, both in the domestic and export markets. This competition requires advanced skills in management, finance, marketing, design, innovation and product development. Rather than relying on unskilled workers, Korea should try to attract highly skilled, highly educated foreign workers who can assist with the long term competitiveness of the economy. The United States has a policy of luring highly educated foreigners to work in research institutes, to develop new technologies and products and to assist in marketing these products worldwide. U.S. companies have simultaneously moved production offshore in low-wage industries and kept the high-skill jobs in the United States.

So too should Korea shift to a more balanced immigration approach. The government should make it easier for companies to hire well-trained foreigners to work in Korea to assist with the globalization and international competitiveness of Korean industry. It is not difficult to imagine the benefits to the Korean economy and Korean industry if, instead of 200,000 ?250,000 low-skilled foreign workers, there were 200,000 to 250,000 highly educated, highly skilled workers helping to develop new technologies, new products, new designs and new management, financing and marketing techniques.

Although it is not a good idea for any given Korean industry to rely for long on foreign low-skill workers, the advances that the Korean economy is making will mean that some industries that begin to lose competitiveness will require such workers until they make the transition to overseas production.

Labor imports will continue; but let's bring some balance to this policy, and look for foreign workers who can have a positive impact on Korean industry and the Korean economy.


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The writer is the president of the American Chamber of Commerce in Korea.

by Jeffrey Jones

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