Industrial Growth Sans More Jobs Picks Up Speed

The output of manufacturing industries increased in 2005-2007, but the trend of "industrial growth with low employment growth" picked speed as labor hours declined, the results of a study released yesterday said.

Productivity rose nine percent over the intervening period, but the growth was found to be an “abnormal expansion” stemming from an excessive decline in labor hours, it said.

The analysis was conducted jointly by the industrial news desk of The Dong-A Ilbo and the Korea Productivity Center on 22 manufacturing industries in Korea from 2000 to 2007.

The average annual production growth rate for the 22 sectors was 7.9 percent over the period, while that for labor (based on labor hours) was 0.1 percent. The annual average productivity growth rate was 7.8 percent.

“The labor hour growth rate has recorded negative growth since 2005, when the five-day workweek was introduced in Korea,” the center said.

“That industrial production increased more than seven percent on average per year with little labor hour growth suggests the trend of ‘growth with low employment growth,’ which entails problems in sustaining economic growth potential.”

Kim Ik-kyun, head of productivity research at the center, said, “As investment in traditional smoke-stack industries declined due to Southeast Asian countries catching up with Korea, productivity is falling as well."

"As productivity is directly linked to economic growth, companies must redouble efforts to increase productivity through innovation.”

lovesong@donga.com achim@donga.com