About 72,000 Manufacturing Jobs Flow out in 2020 Alone
The Korea Economic Research Institute announced on April 19 that approximately 72,000 manufacturing jobs flowed out in 2020 alone. The announcement is based on last year’s overseas and foreign direct investments in the manufacturing sector.
“For the past 10 years, South Korean manufacturers’ overseas investment overwhelmed the foreign direct investment in the local manufacturing sector and the huge gap led to an outflow of jobs,” the institute explained, adding, “Specifically, the average annual investments for 2011 to 2020 are 12.4 trillion won and 4.9 trillion won, respectively.” It went on to say, “In that period, the average annual difference of 7.5 trillion won resulted in 491,000 lost jobs.”
Last year, South Korean manufacturers’ overseas direct investment was 2.6 trillion won in the semiconductor sector, 2.3 trillion won in the electrical equipment sector and 2.2 trillion won in the automobile sector. On the other hand, the foreign direct investment in the three sectors stood at 40 billion won, 90 billion won and 440 billion won, respectively.
In 2020, the job outflow amounted to 15,500, 14,500, 9,300, 5,100 and 4,900 in electrical equipment, automobile, food and beverage, medicine and medical supplies, and semiconductor, respectively. The figures increased by a factor of 1.9 to 37.6 as compared with 2011.
“At present, a high level of labor market rigidity is hindering both investment and employment in South Korea,” the institute pointed out, continuing, “According to the Fraser Institute, South Korea ranked 145th out of 162 countries in terms of labor market rigidity last year.” It commented that an increase in overseas investment is desirable, the problem is the foreign direct investment in South Korea failing to catch up with it, and an outflow of jobs attributable to excessive regulations in the rigid labor market needs to be avoided.