Working hours are too long, not so productive, says ministryKorean employees still spend too many hours at the workplace. Despite all those hours, Korean labor productivity ranks at a low level.
And Korea’s working population is expected to fall significantly starting in 2016 as its society starts aging.
According to the Ministry of Strategy and Finance, Korean employees on average worked 44.6 hours a week.
This is the second longest working hours after Turkey among the 34 countries of the Organisation for Economic Co-operation and Development.
Although Korea has cut its average working hours in the past five years, Koreans still worked almost 15 hours more than the Dutch, who have the shortest average working hours of roughly 30 hours a week.
However, Korea’s labor productivity ranked 23rd in the OECD.
Luxembourg, Norway and the United States were the top three countries for labor productivity.
Korea is notorious for employees spending long hours at their office, and necessarily productive time.
“Although labor productivity has been improving since the global financial crisis, compared to major developed countries it still ranks at a low level,” said an official at the Finance Ministry.
Analysts have often said there’s a need to change the labor structure of small and midsize companies to improve productivity.
Lee Ji-ma, a Yonsei University professor, noted that low productivity especially in small and midsize companies is largely due to an employment structure in which there are large numbers of non-salaried employees.
Last year, the rate of non-regular employees at small companies with less than five employees was 46 percent.
For companies with fewer than 10 employees, the rate was nearly 40 percent. For companies with less than 30 people, it was 37 percent.
For conglomerates with more than 300 employees, non-salaried workers accounted for 17.2 percent.
To raise productivity, Lee said, improving the quality of employment - including reducing the wage differential between major conglomerates and smaller businesses - needs to be worked on.
Another concern is Korea’s relatively low rate of labor force participation.
The labor force participation rate was 66.2 percent, lower than the 70.6 percent OECD average.
This is particularly low considering that 73 percent of the total population is capable of working .
The Finance Ministry said the low labor force participation rate was largely because of young people and women not working.
This trend is expected to get worse with the population aging rapidly.
The government report stressed that the population aged 15 to 64 will rapidly fall while those above 50 will account for 35 percent of the total labor population in 2020.
This is a sharp increase from 16 percent in 1970. Last year 32.9 percent of people working were 50 or older.
While on average 51 percent of males aged 15 to 24 were actively participating in the economy of OECD countries, Korea’s figure was 21 percent.
For females, the OECD average was 43 percent and Korea’s figure was 30.
For males between the ages of 25 and 54, 91 percent were economically active in Korea, which was the average for the OECD. But for females, only 63 percent were active economically, compared to an average of 71 percent.
The percentage of economically active people between the ages of 55 and 64 was higher in Korea: 79 percent compared to the OECD average of 68 percent. For women of those ages, 49 percent were economically active in Korea compared to the OECD average of 48 percent.
The Finance Ministry noted the need to improve the job market to create an environment that could attract the non-active economic population, including women who left jobs to get married or raise children.
This would include an improved childcare support.
“Due to the global financial crisis, the non-active economic population has grown significantly,” said the ministry official. “Although government spending to create jobs is relatively high compared to other countries, systematic management in finding jobs, such as job training, is needed.”
Meanwhile, the Bank of Korea released a report raising concerns that the rapidly aging society could weaken economic growth, lead to a decline in per capita income and trigger a scaling down of consumption, and eventually add to a sharp drop in values of assets such as real estate and stocks.
By Lee Ho-jeong [firstname.lastname@example.org]