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Foreigners benefit from income policies

Wages are up, but hours are down, on income-led growth
Dec 20,2018
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Foreigners working in Korea have seen their paychecks rise and working hours fall thanks to the government’s income-led growth policies, which increased the minimum wage and reduced time on the job.

These same policies have affected their employment security, with the number losing their jobs or working temporary jobs increasing. Many foreigners work in small businesses that are sensitive to fluctuations in economic activity.

As of May this year, 1.3 million foreigners aged 15 and up have stayed more than 90 days in Korea. This is a 6.2 percent, or 76,000, more than a year ago. A total of 523,000 foreigners have become Korean nationals.

Among the foreigners, 40 percent are Chinese of Korean descent, or a total of 521,000, followed by Chinese, at 11.5 percent, and Vietnamese at 10.9 percent.

A total of 884,000 foreigners were employed, 50,000 more than a year ago.

Among the workers, the number of Vietnamese was up 19.2 percent year-on-year, the largest increase among all nationalities. The total is now 79,000, making the Vietnamese number two in terms of nationalities working in Korea.

Korean Chinese are first, at 377,600, or 46 percent of the total. The number of working Korean Chinese grew 3.6 percent year on year. Chinese came in number three, with 52,400 employed, up 4.2 percent year on year.

Foreign workers earning more than 2 million won ($1,771) a month are 62.1 percent of all those employed. Last year, the total was 57.3 percent. The percentage earning less than 2 million won a month has fallen from 42.7 to 37.9.

Hours worked by foreigners are down. Those on the job 40 hours to 50 hours a week were 46.4 percent of the total, or 411,000, while those working more than 60 hours were 31.6 percent of the total, or 191,000. The number working between 40 and 50 hours a week is up 21.7 percent, while the number working more than 60 hours is down 20.4 percent.

“The higher minimum wage seemed to have boosted the wages of foreign workers,” said Bin Hyun-joon, Statistics Korea employment statistics division director. “Those working in low-paying jobs have gone down, while those working in higher paying jobs grew.”

The statistics agency director also said that efforts by the mining and manufacturing companies to reduce working hours even before the shorter workweek was adopted in July have also contributed to shortening the workday of foreign workers.

While the income and the working hours of foreigners may have improved, the study has found that their job security is being threatened.

In just a year, the number of those working temporary or day-to-day jobs, like those at construction sites, has surged 14.2 percent, or 43,000, to 350,000. That is nearly 40 percent of all those employed.

Only 23.8 percent of Korean workers are hired temporarily or are employed day-to-day.

The number of unemployed foreigners has risen 30 percent year-on-year, or 10,000, to 45,000. The unemployment rate for foreign men has seen a significant increase, nearly doubling from 2.7 percent last year to 4.3 percent.

Those categorized as non-active economically increased 4.2 percent year-on-year, up 15,000 to a total of 372,000. These are people who have given up on finding employment and include parents and spouses staying at home.

The statistics agency said one of the main reasons for the increase in unemployment is that many foreigners work at small businesses, which are sensitive to the economy.

Industries such as manufacturing and construction, where many foreigners are employed, have been struggling this year. The business owners have been facing intense cost pressures.


BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]