S Korea struggles to take in foreign workers

September 17, 2013 10:13 am

S Korea struggles to take in foreign workers

By Simon Mundy in Ansan, South Korea

As Sri Lankan music blares from an electronics shop across the road, Sherzod is struggling to count the nationalities of the customers at his café in Ansan, a town of 1m people in South Korea’s Gyeonggi province. “They come from Pakistan, Indonesia, Mongolia, Vietnam . . . there are more coming from Russia these days,” says the 39-year-old Uzbek, his country’s national dress proudly displayed on the wall behind him.Foreigners account for 7.6 per cent of the population of Ansan, making it an exceptionally diverse town in a country that long prided itself on its cultural homogeneity, and where ethnic minority citizens account for a tiny fraction of the population.

But the number of migrant workers in South Korea has risen strongly over the past decade, as the people of this now affluent country turn away from the so-called “3D” jobs – dirty, difficult and dangerous labour, typically on construction sites or factories in industrial towns such as Ansan. And with a looming demographic crunch driven by one of the world’s lowest birth rates, the reliance on foreign labour is likely to spread more broadly in this increasingly mature economy.

Ansan provides a window on the struggles that South Korea faces to integrate a migrant worker population that has risen to around 540,000 from 49,500 in 1990. Kim Hee-jin, a senior official at the city’s migrant community service centre, speaks proudly of the levels of support that are given to foreign workers. They are offered free medical care, counselling, childcare and training – support so generous that it has drawn complaints of unequal treatment from some local residents, she notes.

But not all Ansan’s migrant labourers are happy with government policy. Many came to South Korea under the government’s nine-year-old employment permit system, which is open to foreign workers from 15 Asian countries. The system’s design prevents workers from putting down roots: nearly all are prevented from inviting their spouse or children to join them, for example. The maximum permitted stay is two separate stints each lasting four years and 10 months – meaning that the workers cannot apply for permanent residency, which requires applicants to live in South Korea for at least five years.

Workers can change jobs only with the permission of their employer – meaning companies feel free to mistreat workers who have nowhere else to go, says Mr Fernando, a 49-year-old former teacher from Sri Lanka who prefers not to give his first name. He is now working illegally in Ansan after the expiration of his work permit. “We feel discriminated against,” he says. “If we make a mistake they use rude language and even if foreigners have experience they cannot be promoted.”

Yet the opportunity to work in a stronger economy remains irresistible for workers such as Hariprasad Gautam, who arrived from Nepal in 2011 to take up a factory job in Ansan. “In Nepal I would earn $200 a month, but here it is $2,000,” says Mr Gautam, 41, who sends 85 per cent of his income home to support his wife and twin daughters. He has seen them only once since moving to South Korea, even though his wife also passed the official eligibility tests. “Companies here don’t want lady workers,” but prefer young men well suited to arduous physical labour, says Mr Gautam.

This “circulatory” migrant policy focused on low-skilled labour will need to change, analysts say, as South Korea’s labour shortage becomes pronounced well beyond the sectors already struggling to fill positions, such as manufacturers of wood, metal and plastic products. The country’s birth rate stands at about 1.2 children per woman and if current trends continue, the ratio of workers to the retired will decline from 4.5 in 2010 to just 1.2 in 2050, according to the Organisation for Economic Co-operation and Development.

We feel discriminated against. If we make a mistake they use rude language and even if foreigners have experience they cannot be promoted

– Mr Fernando, a 49-year-old former teacher from Sri Lanka who is now working illegally in Ansan

Growth has slowed along with the formerly explosive development of the dominant manufacturing sector, and the government will need to consider ways to attract skilled foreigners as it seeks to boost the competitiveness of the services sector, says Kwon Young-sun, an economist at Nomura. “If Korea wants to upgrade its services sector like Singapore did, we may need highly educated, highly skilled foreign workers,” he says.

Shrinking opportunities elsewhere and South Korea’s low tax rate for foreigners are making South Korea look increasingly attractive to skilled workers abroad, says Kim In-hye, country head for the executive recruitment firm Russell Reynolds. Yet most will still demand a premium to move to Seoul, with some put off by the language barrier and the country’s rigid corporate culture.

In January, central bank governor Kim Choong-soo made an unusual intervention on this subject by calling for more “open immigration policies” – reflecting an increasingly favourable popular view of immigration in a country where school textbooks used to praise the virtues of an ethnically homogenous nation. A 2010 poll showed that 56 per cent of respondents approved of the extension of South Korean nationality to immigrants from southeast Asia – up from 16 per cent in 1998.

Last year Jasmine Lee, an immigrant from the Philippines, became the first foreign-born member of the South Korean parliament. She is pushing for reforms including steps to make it easier for foreign workers to be joined by their families.

“There was a lot of internal fighting about me,” says the lawmaker, who joined the ruling centre-right New Frontier party after the liberal opposition told her it was “too early” for a non-ethnic Korean to run for election.

“But nobody is cutting me off – they agree with the things I say,” she adds. “People are looking at Japan – at the fact that Korea is going the way Japan did, and at a faster pace.”