Lee Jae-myung Questions Low Wages for Foreign Workers in Shipbuilding Industry

South Korean President Lee Jae-myung has raised concerns about the economic implications of relying on low-wage foreign labor within the nation’s shipbuilding industry. The President’s remarks came during a town hall meeting in Ulsan on January 23rd, where he questioned the sustainability of a model that sees the industry generating substantial profits – “several trillion won” – while employing workers at a monthly wage of 2.2 million won.

President Lee Questions Labor Practices

During the “Listening to Ulsan” town hall, President Lee addressed Ulsan Mayor Kim Doo-gyeom regarding the operation of the Ulsan-type regional visa system. He expressed skepticism about the benefits to the local economy of inexpensive foreign labor, suggesting it could displace job opportunities for Korean workers. He specifically questioned whether the practice of foreign workers remitting most of their earnings home was “desirable.”

Concerns Over Regional Economic Impact

President Lee acknowledged the difficulty in finding domestic workers, responding to Mayor Kim’s explanation with, “That’s because you’re paying them a little.” When Mayor Kim stated that increasing wages would negatively impact shipbuilding companies’ profits, the President reportedly questioned the validity of that claim. He further noted the demanding nature of work in the shipyards, suggesting that the low wages offered would likely attract foreign workers while deterring Korean applicants.

Did You Know? The Ulsan-type regional visa (E-7-3) is designed to bring in foreign professionals trained overseas to work specifically in the local shipbuilding industry.

The President also highlighted a disparity within the shipbuilding sector, noting that while the industry as a whole is experiencing high demand and a backlog of work spanning several years, subcontracting companies are facing significant financial hardship. He described this situation as a “policy dilemma.”

Visa System Under Scrutiny

President Lee directed Mayor Kim to provide a separate report on the visa program, stating that the matter was “very controversial” and he was unsure if the current approach was appropriate. He indicated a need to carefully consider the long-term implications of relying on a system that prioritizes low-cost labor over local employment and economic benefits.

Expert Insight: The President’s comments reflect a broader tension between economic competitiveness and domestic labor market concerns. Utilizing lower-wage foreign labor can boost short-term profits, but it also raises questions about the long-term sustainability of employment opportunities for local workers and the overall economic impact on the region.

Frequently Asked Questions

What is the Ulsan-type regional visa?

It is a visa system where the Ulsan government designs a customized visa program, with approval from the Ministry of Justice, to supply foreign workers to local companies, specifically in the shipbuilding sector.

What concerns did President Lee express about foreign labor?

President Lee questioned whether the practice of employing foreign workers at low wages – 2.2 million won per month – and having them remit most of their earnings home was beneficial to the local economy or fair to domestic workers.

What was said about subcontracting companies?

President Lee noted that while the shipbuilding industry overall is thriving with a significant backlog of orders, companies in the subcontracting sector are facing financial difficulties, presenting a “policy dilemma.”

As the government considers the future of the Ulsan-type visa program, what balance can be struck between attracting foreign investment and protecting the interests of the local workforce?