Dwindling Foreign Workers

Shortage of labor puts on alert the small and medium sized companies. Those companies have a chronic labor shortage. Recently, even worse for them, an increasing number of the foreign workers are quitting their jobs, making it almost impossible for a considerable number of those companies to operate normally.

According to the August 12th press release by those companies and Small and Medium Business Administration (SMBA), many foreign workers in Shihwa Industrial Complex in Ahnsan City have left for other companies or complexes that offer about 20% more wages since May. Originally, in the Shihwa Complex, 7,000 of them worked. In addition, some of the workers even migrate to the service field, which is prohibited under the current law.

Park So-chun, a government official in charge of the western area, confirmed, “The massive migration of foreign workers are forcing some plants out of business.”

What triggered the migration is the government’s policy announced last month. The government announced that it would deport illegal foreign workers by March of 2003. Instead, the government has legalized the status of 256,000 foreign workers who voluntarily reported their overstay until their departures.

Upon this announcement, foreign workers are moving around to make more money until their departure. In the past, since they were out of status, it was tough for them to get a new job.

Yang Kwee-soon, President of Dow Machinery which is in Banwool Complex in Ahnsan, complained, “I had 6 foreign workers early this year. Now I have only 2 of them. I have been cutting down on the operation across the board. Unless I get new workers, I have to close my business.”

Also on the rise is the rate of shortage of workers per workers needed by the industry. According to Korea Federation of Small and Medium Business, the rate was 6.3% early this year. Now it has shot up to 10.7%.

The situation is more severe for the construction industry, since most of them get paid their wages every day, and 5-10 workers make a group and move together.

Owners of small and medium businesses worry about a worst labor disaster after Next March when many foreign workers will leave Korea, making a labor vacuum.

Ki-Jeong Ko Hyung-June Park koh@donga.com lovesong@donga.com