Foreign workers in Korea's booming shipyards struggle with high remittances, debt obligations

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Foreign workers in Korea's booming shipyards struggle with high remittances, debt obligations

Published: 17 Jun. 2025, 15:48 Updated: 18 Jun. 2025, 17:54

Audio report: written by reporters, read by AI

Sokkoko Han, left, a foreign worker employed by a subcontractor at a major shipyard in Geoje, South Gyeongsang, and his colleague boil a chunk of pig’s trotter and cook rice for dinner in their two-room apartment on June 5. [JOONGANG ILBO]

In Geoje and Ulsan, where shipbuilding is booming again, local economies remain stagnant — and growing numbers of foreign workers are being blamed for not spending. But for many, it’s not that they won’t spend — it’s that they can’t.

A large share of their paychecks is remitted to support families back home, while the rest goes toward repaying debts. Those hoping to settle in Korea must save every last won.

Sending 70 percent home

For workers like Sokkoko Han, a 38-year-old welder from Myanmar employed at a subcontractor in Geoje’s Jangpyeong-dong, survival comes first. Earning 2.4 million won a month, Han sends 1.7 million — 71 percent — back home to support his wife, two sons and elderly mother. That leaves him with just 700,000 won to cover food, rent, utilities and daily expenses.

Foreign workers from Samsung Heavy Industries line up at a Daiso store in Jangpyeong-dong, Geoje, South Gyeongsang, after work on June 5. [JOONGANG ILBO]

His breakdown: 400,000 won for food, 150,000 for necessities like cigarettes, 100,000 for rent and 50,000 for phone and utilities. Even with lunch covered by the company and discounted housing shared with two other workers, eating out is off the table. “Buying meals outside is too expensive,” he said. “I don’t have enough money.”

Sokkoko Han, a foreign worker at a subcontractor of a major shipyard in Geoje, South Gyeongsang, shares a two-room apartment with two colleagues from the same country. [JOONGANG ILBO]

To bring the family over

For Vietnamese workers Nguyen Duc An, 38, and Nguyen Van Du, 42, who work as a welder and painter at a different shipyard in Geoje, the goal is to reunite with family. Both hold E-7 skilled worker visas, which allow for family settlement. They remit between 2 million and 2.3 million won from their 2.8 million won monthly wages — as much as 82 percent.

After deductions for dormitory and cafeteria fees, they live on just 500,000 to 800,000 won a month.

“Living in Korea with my wife and two sons, aged 11 and 9, is my biggest dream,” said Du. An added, “I rarely leave the dorm after work. I’m teaching my son Korean and saving everything I can.”

But many arrive in Korea already saddled with crushing debt.

Clothes, toiletries and an iron prepared by Sokkoko Han, a foreign worker at a subcontractor of a major shipyard in Geoje, South Gyeongsang, to send to his wife and two sons back home [JOONGANG ILBO]

According to a survey by Professor Hwang Su-yeon of Geoje University, 24 percent of 466 foreign shipyard workers in Geoje reported paying over 9 million won — and up to 20 million — in recruitment fees. The costs cover brokers, visa processing, airfare, and mandatory language and skills training.

Additional expenses include Korean language and skills training, visa processing and airfare. One foreign worker in his 30s, speaking on condition of anonymity, said he paid $7,500 in fees plus another $1,200 for six months of training costs. Another said he owes 15 million won, while a third estimated his recruitment cost at 10 to 20 million won.

A dormitory for foreign workers at Hanwha Ocean’s shipyard in Geoje, South Gyeongsang. [HANWHA OCEAN]

Already in debt

These upfront costs leave foreign workers scrambling to repay debt as soon as they arrive. Hwang’s study found that foreign shipyard workers in Geoje earn an average monthly wage of 2.66 million won. At that rate, it would take nearly 22 months of paying 1 million won per month to repay a 20-million-won debt — roughly half the legal stay period allowed under their visas.

E-9 nonprofessional employment visas are valid for up to 4 years and 10 months (initially 3 years, with a 1-year 10-month extension), while E-7 skilled worker visas are renewable indefinitely with a valid employment contract, though the initial term is typically three years.

“Starting off 20 million won in debt makes it nearly impossible for workers to spend money locally,” said Prof. Hwang. “Since Korea is the one requesting their labor, the government and local authorities should help reduce the economic burden at the beginning of their stay so they can earn safely and eventually settle here.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY WE SUNG-WOOK, AN DAE-HUN, KIM MIN-JU, KIM YOUN-HO [[email protected]]