Foreign Laborers May Cause Minimum Wage to Sink

An increase in the number of foreign migrant workers could cause the minimum wage offered for low-skilled jobs to drop, according to a recent study.

"Most foreign laborers who come to Korea work in low-skilled positions that mostly require the use of physical labor," Choi Kyung-soo, a senior researcher at the Korea Development Institute, said in a report issued on Thursday. "This effectively lowers the wages of low-skilled Korean workers, while slightly raising the salaries earned by more skilled workers."

According to the report, the 700,000 foreign laborers in Korea account for three percent of all employment in the country. If half of this group were to replace Korean workers at low-skilled jobs who only posses an elementary or junior high school education, the latter's hourly wage would drop by 1.4 percent.

"There has been an influx of foreign laborers for the last 20 years. Considering the changing pattern and trends in wages over that period, they are deemed to have lowered wages for low-skilled workers by around five to 10 percent," Choi said.

Foreign laborers have tended to dominate low-skilled jobs in the construction and hospitality sectors, which has apparently diluted the presence of Koreans in those fields.

Meanwhile, if immigrants including foreign workers continue to flood into the country, it would have the effect of increasing the supply of low-skilled workers in the job market, according to the report.

The majority of immigrants are foreign brides who marry Korean men, and 81.4 percent of them have only high school diplomas, compared to 39.1 percent of Korean citizens. Furthermore, only 70 percent of the children of migrant brides enter high school, whereas almost 100 percent of the children of Korean couples do so.

The report said that a failure to improve the education level of children born to mixed couples would lead to most low-skilled jobs being filled by these second-generation kids, who are projected to account for five percent of Korea's population by 2050.

If half of these children land low-skilled jobs that are mostly filled by Korean jobseekers lacking a high-school diploma, it would lower the wages in the job sector by 2.1 percent, the report said.

englishnews@chosun.com / Aug. 08, 2011 11:32 KST

Korea Employs 700,000 Foreigners


More than 700,000 foreigners are in Korea to work, according to the Ministry of Labor and Employment on Thursday. It said of 1.39 million foreign nationals residing in the country as of late June, over 716,000 are here for employment. Their number amounts to 2.9 percent of all 24.66 million people employed in Korea.

Of the foreign employees, 68.3 percent or 490,000 work here with a work permit, while 23.6 percent or 166,000 work illegally and 15,000 work on short-term contracts under the foreign trainee scheme.

Chinese took up the largest share with 310,000, including 290,000 Korean Chinese, followed by Vietnamese (65,000), Filipinos (30,000), Indonesians (28,000), Thais (25,000) and Uzbeks (20,000).

A majority or 52.7 percent work in the manufacturing sector, 30 percent in the service sector, and 13.2 percent in construction. A lion’s share or 70.8 percent of foreign workers are employed by small businesses with no more than 10 staff.

Under the work permit system introduced in 2004, local firms can hire foreign workers up to four years and 10 months.

englishnews@chosun.com / Aug. 12, 2011 11:33 KST