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Manufacturing sector loses momentum as job creation declines

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Ratio of factory jobs falls to 10-year low

By Yi Whan-woo

Manufacturing jobs in the second quarter of 2023 accounted for 15.5 percent of jobs across all industries in Korea, a record low for the past 10 years, as export growth decelerates and the population shrinks at a faster pace, data showed on Monday.

The Korean Statistical Information Service (KOSIS), a website run by Statistics Korea, showed that manufacturing businesses hired 4.45 million workers in the April-June period.

The figure was 15.5 percent of 28.69 million jobs across all sectors in the cited period, marking the lowest level since 2013 when the statistics agency began taking industrial transitions into account and updated its methods for compiling labor statistics on industries.

The figure, according to analysts, suggests the serious nature of the decline in manufacturing jobs as the rate is lower than 15.3 percent in the second quarter of 1975 when the country was in the early stage of nurturing chemical and heavy industries.

"The decelerated export growth and subsequent economic slowdown is apparently hitting the manufacturing sector harder than other sectors," said Lee Sang-ho, head of the economic policy team at the Korea Economic Research Institute (KERI).

He assessed that manufacturing businesses are labor-intensive and that they can't afford to hire employees as global demand is weakening.

He also noted that Korean manufacturers moving production overseas for cost-efficiency reasons is resulting in fewer newly hired in the manufacturing sector than in other sectors.

The KERI economist pointed out that Hyundai Motor, the country's largest automaker, only plans to build one new domestic plant ― in nearly three decades here ― while aggressively expanding manufacturing in the U.S.

Speaking on condition of anonymity, a Korea Institute for Industrial Economics & Trade (KIET) researcher thinks that the shrinking population, which is evident in younger generations and their tendency to shun "3D" jobs ― a Korean term for jobs considered dirty, difficult and dangerous ― is a cause for the dwindling presence of manufacturing jobs.

"Manufacturing jobs are not necessarily 3D jobs, but even so, young jobseekers do not think so as many of them went to university and opt for white-collar jobs," he said.

The KIET researcher reckoned that increased factory automation is adding to relatively slower growth in manufacturing jobs than those in other sectors.

For instance, jobs in the health and social welfare sectors accounted for 10.1 percent of all jobs in all industries in the second quarter, a record high in the last 10 years.

Asked about possible measures to boost manufacturing jobs, the KERI economist suggested the need to improve labor-management relations and ease regulations.

"You don't want to hire workers if there are uncooperative and militaristic labor unions," he said, adding, "Korea still has a long way to go in softening regulations that hamper Korean businesses operating outside the country from moving their production operations."

Yi Whan-woo


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