S.Korea to see 240K drop in number of manufacturing workers by 2032

A Bank of Korea report says changes in the country's labor environment require the hiring of more foreign workers

S.Korea to see 240K drop in number of manufacturing workers by 2032
Jin-gyu Kang 2
2023-05-10 10:35:54 josep@hankyung.com
Economy

The number of workers in South Korea's manufacturing sector is expected to drop by 240,000 over the next 10 years, a report says, caused by the decline of the youth population due to demographic shifts.

The influx of more foreign workers will thus prove effective in expanding domestic manufacturing, it added.

The Bank of Korea on Tuesday released a report on forecast changes in the workforce by industry and the effects of policy alternatives based on demographic shifts written by Kim Hye-jin and Chung Jong-woo, two economists at the Micro & Institutional Economics Team of the bank's Economic Research Institute.

The number of highly skilled workers in the automotive, electronic device and chemical sectors is expected to fall from 2.52 million last year to 2.48 million in 2032. That of lower-skilled staff in areas like food, clothing, rubber and plastic production will decline by 200,000 from 1.96 million to 1.76 million.

The report said manufacturing alone will suffer a loss of 240,000 workers due to the decline in the number of young and elderly people, two demographics who mainly work in this sector.

To alleviate the decline in the manufacturing workforce, one recommendation was to expand the number of foreign workers. If the share of the country's foreign population rises from 3.8% now to 7.8%, or the average of the Group of 7 economies, by 2032, the number of manufacturing workers will remain at the 20,000 level rather than fall.

The service sector is expected to see a growing workforce. The number of highly skilled jobs in sectors like information and communications technology, finance, health care and education is predicted to rise 4.6% from 7.38 million to 7.72 million over the 10-year period, while that of lower-skill positions in areas such as wholesale and retail and food and accommodations will grow 3.4% from 11.77 million to 12.17 million.

The entry of many women and elderly people into the job market means the payrolls of the service sector, where they mainly work, will grow further. If the female employment rate is raised to the G-7 level, the ranks of highly skilled service workers will grow 150,000, and if the rate for senior citizens is raised to Japan's level, the number of low-skilled service jobs will see a jump of 700,000.

Write to Jin-gyu Kang at josep@hankyung.com
#Korea #manufacturing workers #decline youth population #Bank of Korea #foreign workers

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