SOUTH KOREA: Joblessness Sends Economy Back to Labour Exports

By IPS Correspondents Reprint | | Print |

Ahn Mi-Young

SEOUL, May 7 1998 (IPS) - Years after graduating from an economy that exports labour, South Korea is witnessing the revival of an exodus of workers triggered by record unemployment at home.

This is occurring at a time when unemployment has soared to 6.5 percent from just 3 percent at the end of 1997, in an economy that until recently had been labour-short and importing workers from other Asian countries.

But now South Koreans, especially construction workers and computer programmers and software experts, are knocking on the doors of recruiting firms in search of overseas jobs.

“We are up to ears with inquiries from job seekers,” said a manager at Dong Ah Construction Industrial Co., which recently announced it needed some 300 workers in May for a waterway project in Libya.

“We already have more than 2,000 people who have applied for working abroad,” said Hong Joon-pyo, an official at the International Contractors Association of Korea (ICAK), which works on behalf of eight construction firms including Samsung, Daewoo, Dong Ah and Ssangyong.

ICAK is recruiting 300 to 600 workers of 27 job types, ranging from supervisors, heavy-equipment-drivers, and plaster and welding workers needed for one-year contracts in construction sites in 16 countries, mostly in Sout-east Asia, Middle East and Africa.

“It is a lucky day when I manage to get one-day work for 40,000 won (30 U.S. dollars), and only for half of last year,” said 50-year-old Kim Sang-Bo, a supervisor and steel-structure specialist.

“So I decided to go abroad, as I have two sons at middle school to finance,” explained Kim, who had worked in the Middle East in 1982.

Kim’s decision would have been unthinkable only six months ago. After all, working at overseas construction sites meant a “coarse environment, living far from their families, and getting far lower wages than in domestic construction,” said Hong Joon-pyo, another official at the contractors’ association.

This is why South Korean workers account for only 10 percent of total workers at overseas construction projects owned by South Korean construction companies. These firms have instead hired cheap labour, mostly from South-east Asia or Korean residents in China since early 1990s.

In the 1970s and 1980s, South Korean workers toiled in busy construction sites of the Middle East as the country’s construction companies were building dams, roads and power plants in the region.

But South Korean construction workers have since sharply dwindled at these offshore sites, as the economy picked up and domestic construction boomed and offered them wages three or four times higher than that abroad.

The current economic crisis, however, has raised the spectre of a return to the old days.

Insiders estimate that the crisis has thrown some one million construction workers out of work in recent months. Many laid-off workers, and those who expect to lose their jobs soon, are now applying for the same overseas construction work they have long avoided.

But they face the prospect of earning wages much lower than domestic rates. Menial workers earn some 1,120 U.S. dollars a month, while supervising technicians make 2,250 dollars a month, or far below local wages.

“Letting them work abroad would help earn more foreign currency and ease the jobless rate,” said ICAK chairman Kim Dae- Young. “But the biggest stumbling block is a gap in wages between Korean construction sites and overseas.”

Apart from construction workers, computer programmers are also seeking overseas work in droves.

South Koreans hope to benefit from growing international demand, especially in the United States and Japan, for computer programmers needed to cope with the ‘millenium bug’ problem.

“Programmers are in serious short supply (in the U.S.),” said Peter Percy, president of American Resources Incorporated during his recent visit to Korea.

For 1998 alone, the U.S. demand for computer programmers is projected at 350,000 only for dealing with the ‘millennium bug’ situation. “So we plan to hunt for 20,000 foreigners to be hired by American companies during the next five years,” Percy said.

Companies worldwide are now scrambling for experts to correct computer systems whose clocks would revert to the year “1900” when the millenium comes by, and thus be unable to read the year 2000. This bug could foul up programmes than run everything from insurance and loan records to automated machinery systems.

So far, Indian and Russian programmers have been the preferred experts, but American and Japanese companies are also starting to search for South Korean ones in job fairs.

Computer industry sources estimate that about 100 South Korean programmers have been hired by Japanese or American companies since November, but add that not enough familiarity with the English language is proving to be an obstacle.

Companies that match job applicants with firms report having 30 to 50 people daily applying for jobs abroad, people seeking to fill demand for programmers, semiconductor specialists and telecommunications experts.

But at the same time, a drain on such skilled workers may eventually spell trouble for the economy, especially when the situation improves and “local companies want their former programmers back”, said Maeng Chull-Hyon, executive director of Unisys Korea Ltd.