[No One to Build Ships ③] Government Plans to Solve Labor Shortage with Foreign Workers

Plan to Add Up to 9,000 Foreign Workers Through Fast-Track Entry Support and Quota Expansion
Effectiveness in Question... Short-Term Response Ignoring Root Cause of 'Low Wages Despite High-Intensity Labor'

Editor's NoteSouth Korea's shipbuilding industry is sweeping up global orders with eco-friendly vessels such as LNG (liquefied natural gas) carriers and propulsion ships. However, the workforce lost during the prolonged downturn has not returned. Despite having work, it is difficult to find workers, leading to a "cry of agony amid the boom." Both the previous and current administrations have introduced measures to train shipbuilding personnel and secure foreign labor, but these are seen as policies that fail to resolve structural problems. Although it is a period of order boom, doubts remain about whether the structural issues of the shipbuilding industry?such as continued deficits, cutthroat competition, and low wages?can be resolved. Talented individuals who should secure the industry's future are turning away from shipbuilding, and skilled craftsmen needed for construction work are not moving even when there is a shortage of hands at shipyards. Due to the prolonged downturn, the treatment in the shipbuilding industry has worsened compared to other industries, and the temperature gap caused by the boom and bust cycles has lowered employment stability. The issue is not just about securing skilled workers but also urgently acquiring high-level personnel in eco-friendly ship technology and design. This article examines how to solve these problems in the shipbuilding industry.

[Asia Economy Reporter Choi Seoyoon] The government's plan to expand foreign labor to overcome the manpower shortage in the shipbuilding industry is criticized as a policy that ignores the core issue of "low wages compared to high-intensity labor." There are growing concerns that increasing foreign workers who earn minimum wage will drive wages down further and worsen the situation.

According to the government and industry on the 11th, the main points of the manpower shortage resolution plan in the shipbuilding industry are rapid entry support for foreign workers and quota expansion.

Earlier, the government held the 4th Emergency Economic Ministers' Meeting and announced the "Support Plan to Resolve Labor Shortage," which promotes the rapid entry of foreign workers. The support plan to resolve labor shortages includes three main points: ▲expanding quotas for foreign workers and supporting rapid entry ▲close support for employment services linking job seekers and employers ▲strengthening customized support specialized by industry.

In particular, for the shipbuilding industry, which is facing a severe manpower shortage, the plan is to improve the specialized worker visa (E-7) by abolishing quotas for specialized workers such as welders and painters. Next year, the Ministry of Justice will discuss establishing a separate quota for the shipbuilding industry to convert workers holding non-specialized worker visas (E-9) into specialized worker visas.

A worker is performing welding work at Daewoo Shipbuilding & Marine Engineering Okpo Shipyard in Aju-dong, Geoje-si, Gyeongnam. [Image source=Yonhap News]

The "Shipbuilding Industry Specialized Tomorrow Filling Deduction," which is being piloted to attract domestic workers, will also be expanded. The age limit for beneficiaries will be raised from the current 39 to 45 years old, and the target areas will be expanded from the existing four regions (Ulsan, Geoje, Yeongam, Haenam) to all shipbuilding-dense areas. The government expects that through this, up to 9,000 additional foreign skilled workers can be deployed.

However, there is controversy over its effectiveness. It is seen as a temporary measure to get by rather than a fundamental solution. Critics argue that it may remain a stopgap that postpones fundamental measures addressing poor working conditions such as low wages and subcontracting structures, which are the root causes of manpower outflow in the shipbuilding industry. An official from a major shipbuilding company, who requested anonymity, said, "Some relief may be achieved, but it is hard to see it as a solution. The perfect solution is to invest funds to expand domestic hiring, but since that is difficult, they are indirectly increasing cheap foreign labor."

The problem is that even among foreign workers, there is a tendency to avoid the shipbuilding industry. Foreign workers form networks by country and share information such as wage levels. This means they are well aware of the poor working conditions, including low wages and high risks.

Foreign workers usually start by signing a five-year contract with subcontractors. Their wages are at the minimum hourly wage. The annual income is about 30 million KRW. On site, many leave after a short time. They move to other industries near shipyards in Busan, Changwon, and other areas. Lee Kimchuntaek, secretary of the Geoje-Tongyeong-Goseong Shipbuilding Subcontractors' Union, said, "Foreign workers are not fools. If you ask them whether they want to work in a place that pays little and is hard or a place that pays more and has a lower workload, naturally they would choose the latter." Especially, if the number of foreign workers increases, a vicious cycle may occur where the treatment of subcontracted workers worsens. There is a high risk that low wages and hazardous working environments will become entrenched as foreign labor increases.

Even if the government implements support measures for foreign skilled workers, their motivation to become skilled craftsmen is uncertain. Secretary Lee explained, "Even if they diligently learn skills like welding and hull painting to become so-called A-grade workers, since there is no shipbuilding industry in their home countries, the skills become useless once they leave Korea. Even if they become skilled workers, the wage increase is not significant, so there is little incentive to stay in shipbuilding." It also creates a burden for subcontractor management. Employing foreign workers incurs additional costs for lodging and meals, and they must also handle communication difficulties due to lack of Korean language skills.