[New Korean Dream⑩] From "Boss, You're Mean" to "Hiring Employees"

Unfair Labor Conditions Give Rise to 'Buzzwords'
Manufacturing Industry United in Calling for "Improvement of Employment Permit System Quotas"
Decrease in E-9 Visa Workers...Challenges in Workforce Supply
Outflow to Delivery Industry...Foreign Workers Become 'Precious' Workforce

"The boss is mean."

This is a catchphrase from Blanca (comedian Jeong Cheol-gyu), a foreign worker character popular in a 2004 domestic comedy program. It encapsulates the hardships of foreign workers who came to Korea with the 'Korean Dream' and had to endure unfair labor conditions. There was resistance, too. It is said that small and medium-sized enterprise (SME) owners collectively protested to broadcasting stations. Now, 18 years after the introduction of the Employment Permit System (EPS) that year, voices are growing louder calling for its reform in response to changes in the industrial environment. Additionally, due to a decrease in production workforce, avoidance of 3D jobs (difficult, dangerous, dirty), and the impact of COVID-19, the status of foreign workers has changed significantly. Foreign workers have become 'precious assets' to the extent that SME owners have to pay premiums to employ them. 'New Korean Dream'

◆Labor environment improved but... ‘Quota system’ still causes manpower shortage= The Employment Permit System allows companies that cannot find domestic workers to legally employ foreign workers. The government issues non-professional employment visas (E-9) to foreign workers from 16 countries and guarantees them equal treatment as domestic workers. Foreign workers employed under this system can stay for up to three years in principle, with a possible extension of 1 year and 10 months upon re-employment. They are subject to the same labor laws as domestic workers, including the Labor Standards Act and Minimum Wage Act. They must also be enrolled in the four major social insurances. Last year, the Constitutional Court ruled that the EPS restriction on changing workplaces for foreign workers is constitutional.

Although the EPS was expected to positively impact stable manpower supply, its effectiveness is being questioned. Especially in the SME sector, there are increasing criticisms that the EPS does not properly reflect on-site conditions. According to Statistics Korea, the number of foreign workers who obtained E-9 visas through the EPS and worked domestically was 255,600 in 2017 (as of May), accounting for 30.6% of the total foreign employed population (834,200). However, by 2021, this number dropped to 216,000, or 25.3% of the total (858,300). Over the past five years, while the total number of foreign workers increased, the number of E-9 visa holders decreased.

In the SME field, there are calls to reform the ‘foreign worker quota’ stipulated by the EPS to better reflect reality. The quota limits the total number of E-9 visas by industry each year to protect domestic jobs. The foreign worker quota decreased from 56,000 in 2017 to 52,000 in 2021. During the same period, the manufacturing quota, which is key to SMEs, dropped from 42,300 to 37,700. This year’s quota is about 59,000, with the manufacturing quota around 44,500. A representative from the Korea Federation of SMEs explained, "As of the second quarter this year, the E-9 quota is 7,284, but the manpower requested by SMEs is 14,083," describing the foreign labor shortage as severe.

◆Short stay periods and manpower outflow... foreign workers’ value rises= The maximum stay period under the E-9 visa is 4 years and 10 months, which is a chronic problem. Workers become familiar with the language and improve their job skills, but inevitably have to leave. Lee Gyu-yong, senior researcher at the Korea Labor Institute, said, "The stay period should be extended to a maximum of 12 years (four extensions of 3 years each), and employer sponsorship should be applied upon re-entry." Nom Min-seon, a researcher at the Korea Institute for Startup & Entrepreneurship Development, pointed out, "The labor productivity of foreign workers who have worked for more than three years is about 100.2% compared to domestic workers under the same conditions," and suggested, "The scale of long-term stay visas (E-7-4) for skilled foreigners working under qualifications like E-9 should be expanded, especially for SMEs outside the metropolitan area."

According to Ministry of Employment and Labor statistics, the number of E-9 workers has been declining since the outbreak of COVID-19, which restricted entry into Korea. In 2020, the number was 181,000, down 4.1% from the previous year, and in 2021, it was 159,000, down 2.2% from the previous year. Also, as the 52-hour workweek system reduced overtime pay, manpower has been flowing into the delivery market.

As the value of foreign workers rises, the relationship with employers has even reversed. According to recent counseling cases at the Incheon Foreign Workers Support Center, all foreign workers at Company A requested a workplace change from their employer, and when this was refused, they collectively refused to work. Min Dae-hong, director of the Korea Clay Brick Industry Cooperative, said, "Foreign workers exchange information through social networking services (SNS) and often move to workplaces with higher wages or better working conditions," adding, "When employers refuse to terminate labor contracts, workers sometimes engage in slowdowns."