Holistic approach to immigration needed for Korea
Sven-Hendrik Arp
By Sven-Hendrik Arp
Korea's population is shrinking. With the country's birthrate ranked lowest among OECD nations at 0.92 as of 2019, the country's working age population is expected to decline from currently 37.6 million people to 25.6 million people by 2047. Over the same period, GDP growth would slow down significantly into the 1 percent range.
The rapidly changing demographic structure now more than ever brings an important question to the forefront of Korean politics and society: Whether increased immigration is the answer to secure Korea's long-term economic growth.
The history of Korea's post-war economic development is deeply intertwined with the topic of immigration. In the 1960s and 1970s, thousands of Korean guest workers arrived in my home country of Germany. While men were employed under harsh conditions to maintain the German mining industry, women worked tirelessly as nurses in hospitals. With the young expatriate workers bringing foreign currency to Korea through remittances, the country was able to push ahead with the buildup of its infrastructure and economic development.
In just a few decades, Korea made an impressive transformation from an economy based on agriculture into a global leader in manufacturing.
Since the 1990s, the role of Korea as a “labor exporter” has reversed. As industrialization and income levels advanced, the country is now experiencing a severe shortage of low-skilled labor.
As of 2019, there are around 1.4 million economically active immigrants in Korea with many working under harsh conditions in 3D professions: dirty, dangerous and demeaning. While automation, AI and other aspects of the emerging Fourth Industrial Revolution might make a significant portion of such work redundant, the number of immigrant workers has only increased in recent years and is expected to continue to do so for the foreseeable future.
However, it is not only the demographic change and the search for cheaper labor by Korean companies to stay internationally competitive that leads to the increase in the need for foreign labor.
Korea has a highly educated population with its university enrollment rate highest among OECD countries at 68 percent. Despite the large number of overeducated and underemployed graduates, most young Koreans are shunning less prestigious blue-collar professions. As the aging workforce transitions into retirement, it remains questionable if the Korean government can successfully remove the stigma associated with these jobs and fill the positions with young Koreans.
The often repeated talking point that immigrants are taking away opportunities from the native population therefore falls flat in the case of Korea.
Moreover, studies have shown that immigration is in most cases an economic net gain for host countries. According to a McKinsey report in 2016, immigrant workers contributed over 9 percent of total global GDP while only making up around 3 percent of the total population. Not only highly trained but also low-skilled foreign workers were shown to contribute to productivity in destination countries without harming wages for native workers.
Thus, Korea would be well advised to increase the integration of foreign labor into its economy to ensure future growth.
Besides contributing to Korea's economic output today, immigrants can provide a demographic boost to the current and future labor force in Korea. This could be a major benefit for an economically developed country with an aging population such as Korea, which is already facing a slowdown in economic growth and unsustainable pensions over the long term. In fact, Korea's National Pension Service is expected to run out of funds by 2057. The ripple effects of a collapsing welfare system would be devastating.
Despite benefits outweighing any possible negatives, immigration is, however, not without its costs. Korea needs to bear both short-term entry costs as well as mid- to long-term integration costs.
As the previous Director-General of the International Labour Organization, Juan Somavia, put it: “Migrants are an asset to every country where they bring their labor. Let us give them the dignity they deserve as human beings and the respect they deserve as workers.”
The necessary integration of immigrants to stimulate growth in Korea cannot only happen “at the margins” of society. Foreign workers should not be regarded as mere growth motors that can be discarded when they are no longer required.
Still today, foreign workers in Korea are often prevented from settling down permanently. At the same time, the insufficient legal and institutional framework for immigrants leads to issues such as instances of abuse due to the power imbalance between workers and employers.
Ultimately, Korea needs to come to terms with the reality that the economic, social and civic dimensions of migrant integration need to be addressed holistically.
Such efforts will fundamentally change the Korean society. Nobody should expect Korea to transform its system overnight to accommodate a dramatically higher influx of foreign workers. However, if Korea wants to maintain its position as an economic powerhouse, the question is not if the country should embrace more immigration but how.
Sven-Hendrik Arp is a student at Yonsei University Graduate School of International Studies.