Factory All-Stop Without Foreign Workers... Reality of Korea Passing Grows [Foreign Worker Cliff]

③Intensifying Low Birthrate Trend Spurs Competition for Working Population
Japan's Foreign Workers Nearly Triple in 10 Years
Southeast Asia Also Faces Low Birthrate Trend... Could Prevent Population Outflow

A foreign worker learning how to prepare tuna sashimi at a large restaurant in Japan. [Image source=Photo by X (formerly Twitter)]

Editor's NoteIt has been 20 years since the Employment Permit System for Foreign Workers (hereinafter referred to as foreign workers) began with the entry of 92 Filipino workers in August 2004. As of the end of last year, the number of foreign workers reached 920,000, increasing ten thousandfold over the past 20 years. Considering the need to fill labor shortages in 3D industries (difficult, dangerous, and dirty jobs) that domestic workers avoid, and the accelerating trend of low birthrates and aging populations, many more foreign workers will be needed in the future. However, foreign workers face visa barriers that lead to a vicious cycle of deportation before becoming skilled workers or remaining as undocumented immigrants. This contrasts with neighboring countries like Japan, where population decline has begun due to low birthrates, actively lowering immigration barriers to encourage foreign workers to settle. Although a competition for foreign workers among countries is expected in the future, South Korea has yet to establish even a control tower to oversee immigration policies, resulting in a rapid increase in undocumented immigrants. This article examines the current status of South Korea's foreign workers and immigration policies, along with desirable policy directions for sustainable growth and securing a working-age population.

The competition to secure foreign workers among advanced Asian countries such as South Korea, Japan, Taiwan, and Singapore is intensifying amid deepening trends of low birthrates and aging populations. Especially in Japan, where population decline is rapidly progressing due to prolonged low birthrates, the number of foreign workers has nearly tripled over the past decade, increasing reliance on external labor. The reason Japan, Taiwan, and Singapore are actively lowering immigration barriers is interpreted as a move to prepare for the anticipated competition in foreign worker supply and demand. Meanwhile, the low birthrate and aging trends in Southeast Asian countries, which mainly supply labor to these countries, have also begun to accelerate rapidly, raising concerns that securing foreign workers will become even more difficult in the future.

Japan's Foreign Workers Surpass 2 Million for the First Time... Competition to Secure Working Population

According to Nihon Keizai Shimbun (Nikkei), the number of foreign workers in Japan, as compiled by the Ministry of Health, Labour and Welfare, reached 2,049,000 at the end of last year, surpassing 2 million for the first time in history. The number of foreign workers, which was 788,000 in 2014, has nearly tripled in just 10 years. This figure is overwhelming even compared to major Asian foreign worker recipient countries such as South Korea (920,000), Taiwan (740,000), and Singapore (1,530,000).

Nevertheless, the Japanese government decided in June this year to drastically revise the Immigration Control and Refugee Recognition Act, abolishing the 'Technical Intern Training Program' for the first time in 30 years and introducing the 'Fostering Employment Support System' aimed at securing a large number of foreign workers. The existing Technical Intern Training Program prohibited job changes for three years under the pretext of transferring skills to workers from developing countries and limited the training period to five years. However, the new Fostering Employment Support System removes all these restrictions. Job changes are now free, and the length of stay in Japan can be continuously extended.

The reason Japan has unlocked the gates for foreign worker inflow is that the working-age population (ages 15-64) is rapidly decreasing every year. According to the '2023 Japan Population Statistics' released by the Ministry of Internal Affairs and Communications in April, Japan's working-age population was 73.95 million, a decrease of 256,000 from the previous year. This marks 15 consecutive years of decline since recording 82.76 million in 2008. If this declining trend continues, Japan's working-age population is projected to fall to 59.8 million by 2040, breaking below the 60 million mark.

As a result, it is expected that from the 2040s, Japan will try to secure most of the foreign workers coming from emerging Asian countries. According to the Japan International Cooperation Agency (JICA), Japan will need at least 6.75 million foreign workers from 2040 onward to cover the shortage in the working-age population. This means nearly 5 million more than the current number is required. If Japan further lowers immigration barriers and raises wages for foreign workers, it is feared that South Korea's foreign worker supply will decrease accordingly.

Deepening Low Birthrates in Southeast Asia... Possible Lockdown on Population Outflow

The deepening low birthrate trend in developing Southeast Asian countries, which are major sending countries of foreign workers, is also expected to exacerbate difficulties in securing foreign workers in the future. Many countries in Southeast Asia have fertility rates below the replacement level of 2.1, which may lead to restrictions on the outflow of the working-age population.

According to World Bank (WB) data, Vietnam, a major foreign worker sending country in Southeast Asia, recorded a total fertility rate of 1.94 at the end of last year. Vietnam's fertility rate has been steadily declining since it fell below 2.1 at 2.07 in 2000. Thailand's fertility rate has dropped even more sharply to 1.33. Other countries such as Bangladesh (1.98) and Sri Lanka (1.99) have also fallen below the 2.1 level.

In particular, aging is progressing very rapidly in Vietnam and Thailand. According to the General Statistics Office (GSO) of Vietnam, the population aged 65 and over accounted for 7.6% of the total population last year, marking Vietnam's entry into an aging society with an elderly population ratio exceeding 7%. Thailand's elderly population ratio is 14%, moving beyond an aging society into an aged society.

The rapid progression of low birthrates and aging in Southeast Asian countries may intensify the competition to secure foreign workers within Asia in the future. The British economic media outlet The Economist pointed out, "As competition to attract foreign workers among wealthy Asian countries intensifies, securing labor may become more difficult. Countries that have produced many migrant workers are also experiencing low birthrates and aging, and anti-immigration sentiment within countries could also pose a problem."

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