[EDITORIALS]Jobs disappearReports say that the number of jobs in Korean manufacturing industries declined by 75,000 in the first half of this year. That is the biggest job loss since the first half of 1999, directly after the 1997-98 financial crisis, when the number of manufacturing workers fell by 104,000.
Although the number of total workers has climbed gradually, the number of manufacturing workers has declined, indicating that the employment structure is becoming distorted. The number of attractive jobs in the manufacturing sector is declining, while the number of unstable jobs in small service businesses with poor working conditions is increasing. In such conditions, an expansion in the number of total workers or a drop in the overall unemployment rate has no real meaning.
A reduction in the number of jobs is a common phenomena in all manufacturing industries, including textiles, machinery and equipment, excepting only the automobile industry, whose business has prospered recently. With investment in facilities sluggish, the strengthening of the local currency against the U.S. dollar and the rise of international crude oil prices are causing a drop in the profitability of domestic companies.
Accordingly, a reduction in the number of manufacturing jobs is probably natural. The government recently lowered its forecast for new job creation for this year from 400,000 to 350,000, citing the deterioration of employment conditions. The forecast includes so-called “social jobs” such as temporary jobs in the local government offices and seasonal jobs.
In fact, the government could create attractive jobs, if it made up its mind to do so, by attracting local companies who are looking for foreign investment locales by offering better conditions here, or by more aggressive efforts to lure foreign investors to Korea.
Samsung Electronics recently decided to set up a semiconductor wafer production company with capital of $400 million in Singapore in a joint venture with a German company. To attract that plant, which would employ 800 people, the Singapore government offered exceptionally good conditions, including corporate tax exemptions for 15 years and government subsidies of $27 million. The plant could have been built in Korea if the conditions were proper. Why can’t the Korean government attract such investment? Far from offering preferences, the Korean government, with its regulations, is driving out the existing investors in Korea and causing job reductions.