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South Korea Carefully Tests the Waters on Immigration, With a Focus on Temporary Workers

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South Korea Carefully Tests the Waters on Immigration, With a Focus on Temporary Workers

Vietnamese migrants learn Korean. (Photo: Truong Van Vi/ILO)

Over the past decade or so, the Republic of Korea (South Korea) has come to grips with an impending demographic crisis by systematically beginning to open itself to immigration. Faced with an aging population and fertility rates too low to meet the country’s demand for workers, South Korea has gradually implemented a number of policies in recent years to relax its strict controls on immigration, tackle illegal immigration, and attract foreign workers. These efforts have begun to pay off: At the end of 2015, the country counted nearly 1.5 million registered foreign nationals, just under 3 percent of the population of 51.5 million. This represents an increase of 235 percent over the 438,000 registered foreign nationals at the end of 2003.

One of the Asian Tiger economic success stories, South Korea transformed from a struggling, developing nation to a prosperous, industrialized country as a result of its export-oriented strategy. Gross national product (GNP) increased from US $142 per capita in 1967 to US $27,200 in 2015. Due to its falling unemployment rate, South Korea by the early 1990s realized it needed temporary labor to fill unskilled jobs that natives were becoming less and less willing to do. In fact, without foreign labor, coming chiefly from China and Southeast Asian countries, it would have been nearly impossible to keep the economy growing.

As a country that places a high value on its ethnic and cultural homogeneity, this need for foreign labor also marked the beginning of a conflict with the desire to remain a purely Korean nation, posing a challenge for policymakers. There have not been serious tensions in South Korean society due to the sharp increase in the foreign population, however, partly because a majority are temporary guest workers or marriage migrants. Tension might intensify in the future, as some academics and government researchers propose permanent migration as a long-term remedy for South Korea’s graying and shrinking population.

The number of Koreans living abroad exceeds the number of migrants within Korea, with more than 2 million Koreans residing elsewhere, many in advanced countries including the United States, Canada, Australia, and Japan. Despite recent demographic shifts, there is not a systematic effort to woo back Korean nationals abroad. Most of all, what South Korea needs is workers who are willing to work in so-called 3-D (difficult, dangerous, and demanding) jobs, which many Koreans are unwilling to do. However, the country’s immigration laws afford the Korean diaspora opportunities to return and work.

Historical Background

Most Koreans believe that Korea was founded as one state about 5,000 years ago and since that time has been a one-race, “one-blood” country, despite experiencing many invasions from neighbors. After the Shinra dynasty unified the Korean peninsula for the first time about 1,500 years ago, Korea lost its independence only once, during the period of 1919 to 1945.

Owing to its geostrategic importance, Korea has a long history of conflicts, invasions, and military occupations. Its peninsula location is critical, with China and Russia along the northern border and Japan across the Korea Strait. During the Japanese colonial period in the early 20th century, millions of Koreans left for a new life abroad, leading to large Korean communities in China, Japan, and Russia that still exist today. Hawaii, where Koreans worked on sugarcane plantations, was also a major destination in this period.

After receiving its independence from Japan in the wake of World War II, the country was divided into north and south. The Korean War of 1950-53, a central battle in the fight against communism, caused a population upheaval, most significantly the movement of 10 million people from the communist north to the south.

Once the war had ended, and particularly after the United States opened the door to non-European immigration in 1965, South Koreans began migrating to the United States to study or to find a higher quality of life. The population of South Koreans in the United States grew particularly rapidly from the 1980s onward, reaching 1,120,000 in 2015. Other top destinations for Koreans include Japan (with 522,000 migrants), China (187,000), and Canada (144,000). Millions of construction workers also went to the Middle East in the 1970s-80s as employees of South Korean contractors, although most returned home after a few years.

Beginning to Become a Country of Immigration

Long a country of emigration, South Korea has made movements toward opening itself to immigration in the face of decades of falling fertility rates and labor shortages. South Korea’s fertility rate was 4.5 children per woman in 1970, which plummeted to 1.21 by 2014, the lowest of any Organization for Economic Cooperation and Development (OECD) country. This is partly due to the ever-increasing educational and professional achievement of married women. Coupled with lower fertility is the graying of the population: 14 percent of South Koreans will reach age 65 by 2019, and 20 percent between 2026 and 2030.

Meanwhile, South Korea’s highly educated population has grown sharply, with the country recording the highest educational attainment in the 25-34 age group among all OECD countries. South Korea soon began to realize that it needed migrant workers to fill low-skilled jobs that few native workers wanted to do. But strict migration controls that offered no pathways to bring low-skilled workers in legally made it difficult for South Korean employers to fill this demand with authorized foreign workers. By the mid-1990s, more and more people from other Asian countries—including China, the Philippines, Indonesia, Thailand, Vietnam, and Mongolia—were overstaying their tourist visas and joining the workforce. Many foreign workers found jobs in small manufacturing companies, construction, and restaurants.

In the early debates concerning the use of unskilled foreign labor, one of the critical issues was whether the need for labor was an ephemeral or structural phenomenon. After the Asian financial crisis, which hit in December 1997, it became apparent that without temporary foreign workers, some sectors of the South Korean economy would not be viable.

As South Korea began to recover from the financial crisis and demand for labor grew again, the number of unauthorized workers rose from 100,000 in 1998 to 289,000 in 2002—a result of the imbalance between labor market needs and legal immigration pathways. By 2002, unauthorized workers represented 70 percent of South Korea’s total foreign labor force.

Opening the Door to Legal Temporary Workers

The main labor migration issue has been and continues to be temporary workers in lower levels of the economy. Since 2002, South Korea has taken a number of steps to overhaul its labor migration system, resulting in gradually loosened controls and a declining unauthorized population. These actions reflect South Korea’s recognition of critical labor market needs and a willingness to adjust policy accordingly. Skilled workers, meanwhile, including entertainers, researchers, and language teachers, are welcome to temporarily work and live in South Korea. Skilled workers with valid employment contracts easily acquire relevant visas and can renew their visa status. Some international talent, including technology workers, can move to Korea through an express procedure.

Unauthorized Workers and the Employment Permit System

Until 2003, South Korea had no official provisions for the entry of temporary low-skilled foreign labor. Instead South Korea used its industrial trainee scheme which was originally intended to upgrade the skills of foreign workers employed abroad by overseas South Korean firms. In 2002, the government increased the number of industrial trainees under the foreign trainee program by 20,000, to 145,000.

The presence of unauthorized foreign workers eventually caught the government's attention, and, in June 2002, it recognized the need to give temporary legal status to low-skilled foreign laborers for the first time. This initiative, known as the Employment Management System, was limited to temporary foreign workers in the service sector with Korean ancestors (mainly Chinese Koreans). Due to the program’s limited scope (in 2002, it issued 156 worker visas), it did not significantly decrease the number of unauthorized workers. In July 2003, the government introduced the Employment Permit System (EPS), a guestworker scheme, and the following year the Employment Management System and the EPS were made to operate side-by-side, with the government examining the number of workers in one when considering how many to admit into the other.

When EPS was introduced, it gave many unauthorized foreign workers the opportunity to apply for a permit, depending on how long they had been in the country illegally. At the same time, unauthorized migrants who did not qualify for a permit were given a chance to leave the country without paying any fines. Foreign workers who had been in Korea for less than three years as of March 31, 2003 were able to stay for an additional two years at most. Those present for three to four years could leave Korea with an advance approval certificate to re-enter, and if they did so within three months of their departure, they could work for a maximum of five years, including their illegal stay in Korea. Those illegally present in Korea for more than four years were required to leave Korea or face deportation. This amnesty boosted the authorized foreign worker population by 57.2 percent—from 320,558 at the end of 2002 to 504,038 one year later.

The industrial trainee system operated in parallel with EPS until the end of 2006. It was abolished on January 1, 2007 and merged with EPS, which became the sole avenue for bringing in low-skilled foreign labor for domestic work. EPS is divided into two subsystems: the General EPS based on Memoranda of Understanding (MOUs) drawn up between the South Korean government and sending countries and the Special Case EPS granting foreign nationals of Korean ancestry visiting worker status so they can get a job in South Korea. Foreign workers brought in under the General EPS are given E-9 nonprofessional employment visa status, while those under the Special Case EPS obtain H-2 visiting worker status. H-2 visa holders do not need an employment contract before they enter, and there are no restrictions on employment sectors and workplace changes for them, while E-9 visa holders need an employment contract, are tied to their employer, and are restricted to certain sectors, including agriculture, construction, fishing, and manufacturing.

General Employment Permit System

Under the General EPS, qualified Korean employers (those with fewer than 300 employees in the manufacturing, agriculture and livestock, fisheries, construction, and service sectors) can enter into employment contracts with foreign workers who pass a Korean language proficiency test and are determined to be in good health. These workers are given E-9 visas.

Employers who wish to employ low-skilled foreign labor must first demonstrate that they have spent at least 14 days (seven days in some cases) attempting to find Korean workers by requesting help from public employment centers. When allocating new workers, a system to grade employers, adopted in 2012, is applied. Employers with the highest scores are given first priority in foreign workforce allocation.

These workers come to South Korea through government-to-government agreements. The government has signed MOUs with 16 countries, including the Philippines, Sri Lanka, Vietnam, Thailand, and Indonesia. After a maximum three-year employment period, foreign workers must leave South Korea for six months before they are allowed to return for another three-year period.

Furthermore, South Korea also introduced the Sincere Worker Re-entry System in 2012 to prevent the illegal presence of temporary foreign workers and support employers by allowing them to continue legally employing trained and capable workers. Sincere Workers can stay for a maximum employment period of four years and ten months (initial three-year period, followed by an allowed extension of one year and ten months upon employer request) and are allowed to return after a three-month period outside the country. In the first 11 months of 2016, 54,597 workers were admitted under the General EPS, 6,707 of whom were Sincere Workers.

Table 1. Low-Skilled Foreign Workers in South Korea, by Visa Type

Note: Data as of December 31 of each year.
Source: Republic of Korea Ministry of Justice, Immigration Service, Employment Permit System (EPS) website, accessed February 22, 2017, available online.

Foreign workers may change their workplace a maximum of three times within a period of three years after entering Korea. Workplace changes for reasons that are not the fault of the worker do not count toward this tally. Family members of low-skilled foreign workers are not allowed to enter, a restriction purposely designed to dissuade workers from permanent settlement in South Korea.

Special Case Employment Permit System

The Special Case EPS allows designated businesses or workplaces to hire foreign nationals of Korean ancestry with H-2 visas after their entry into Korea. After they complete a required multiday training course on living and working in South Korea, they may freely search for employment. Like workers under the Sincere Worker Re-entry System, they can stay for a maximum employment period of four years and ten months. However, they are not subject to the re-entry restrictions that other foreign workers must follow under the General EPS.

Manufacturing, agriculture and livestock, fisheries, construction, and the service sectors are among those eligible for the Special Case system. However, more service sectors, such as retail, wholesale, hotels, and restaurants, are open for foreign nationals of Korean ancestry (five service sectors for the general system, versus 29 for the special case system). Employers must also search for domestic labor for a certain period before they can receive a permit to hire a foreign national of Korean ancestry.

Main Achievements and Challenges Facing the Employment Permit System

Twelve years after its launch, the General EPS has brought meaningful results to temporary foreign labor policy in South Korea. The system has introduced transparency and legality to the employment process, correcting earlier flaws.

Notably, it has solved labor shortages for small- and medium-sized businesses. The number of low-skilled foreign workers employed under the system has steadily increased, reaching 512,384 at the end of 2015—accounting for 90 percent of all foreign workers in South Korea.

Sectors permitted to employ foreign workers under the General EPS expanded from manufacturing, construction, and agriculture and livestock to later include fisheries and some service sectors (for example, refrigerator and freezer storage). However, in 2014, nearly 80 percent of newly admitted foreign workers of non-Korean ancestry were employed in manufacturing (see Table 2).

Table 2. Newly Admitted Foreign Workers of Non-Korean Ancestry in South Korea under General EPS by Sector, 2014

Source: Republic of Korea Ministry of Employment and Labor, 2015.

The number and share of foreign nationals of Korean ancestry in manufacturing have increased since 2011, particularly once all sectors were allowed to hire foreign nationals of Korean ancestry. Between 2007 and 2014 the number of those newly employed in manufacturing more than doubled to 60,417 workers, and their share of the total increased from 29 percent to 61 percent.  Meanwhile, 33,385 workers (34 percent) were employed in services, and 3,326 workers (3.4 percent) in construction, a marked decrease from 2007 (see Table 3).

Table 3. Newly Admitted Foreign Workers of Korean Ancestry in South Korea under Special Case EPS by Sector, 2014

Source: Republic of Korea Ministry of Employment and Labor, 2015.

The system also has prevented the long-term settlement of foreign workers. In 2004, unauthorized immigrants represented about 30 percent of all foreign workers. When all temporary labor policies were consolidated under EPS in 2007, the percentage of workers in the country illegally began to drop drastically; 2015 saw a low of 10.4 percent (64,893 out of 625,129). As of December 31, 2015, just 9.7 percent of foreign workers under EPS (54,362 out of 561,384) were unauthorized.

The new system also considerably reduced the costs associated with coming to South Korea. Under the earlier industrial trainee system, private placement firms in South Korea and origin countries were involved in a variety of corrupt practices, including excessive payment demands for jobseekers. Many trainees deserted their assigned workplaces or failed to repatriate, working illegally after their training period because they were unable to recoup the excessive placement fees. These costs fell from an average of US $3,509 per worker under the earlier system in 2001, and even more for illegal employment, to US $941 under EPS in 2014, according to the Human Resources Development Service of Korea.

Third, EPS helps eliminate discrimination against foreign workers by ensuring labor laws are applied equally to migrant workers and Koreans, and that foreign workers have the same access to the four major insurance systems: health insurance, industrial accident compensation, employment insurance, and national pension. Delays in payment of wages also dropped markedly, with 36.8 percent of foreign workers reporting delays in 2001, compared to 1.1 percent in 2011. Under EPS, occupational accidents fell by nearly half. However, between 85 and 114 workers are still killed by occupational accidents each year, and unfair treatment and exploitation of foreign workers persists. Human-rights organizations and other groups have been demanding the government take stronger actions to punish rogue employers.

Remaining Challenges

The temporary labor program faces a number of challenges. First, the government is considering introducing a selection system based on points and making skills tests mandatory for foreign workers. Jobseeker placement lists are made based on a list of those who have successfully completed a mandatory Korean language test. After taking a voluntary skills test, jobseekers are listed in order of their priority for placement, by their scores and other criteria. Many employers consider a variety of other factors beyond language ability. The proposed points system combines a number of criteria beyond Korean language ability, such as skill level, work experience, training, and other qualifications.

Second, in determining foreign worker quotas each year, the government considers labor shortages and demands for the replacement of workers who have left the country after their employment period ended or were deported after overstaying their permit. However, because labor shortages are determined based on surveys of employers in the previous year, the number of foreign workers permitted sometimes does not reflect the latest shifts in labor demands. Furthermore, because new workers can only be allocated to a workplace three to four times per year, labor shortages often occur due to the inability to replace a worker after his or her repatriation at the end of the employment term, or for other reasons. The government plans to consider labor market conditions, including the number of idle domestic workers, and the medium-to long-term outlook on workforce supply and demand when allocating foreign workers.

Third, foreign workers under the General EPS are not permitted to change workplaces unless unavoidable circumstances arise that fall outside the responsibility of the worker. Though these provisions aim to protect employer interests, some allege that they constitute discrimination and severely curtail the freedom of foreign workers to choose jobs. Foreign nationals of Korean ancestry are able to freely look for jobs and change workplaces, while those of other backgrounds cannot. The government has taken some steps to remedy this. In 2012 it expanded the permitted grounds for workplace changes to include delayed wage payment, the violation of contractually agreed-upon working conditions, and unfair treatment. It also allowed foreign workers to change workplaces due to temporary or permanent business closures, which fall outside the foreign worker's responsibility.

Fourth, when the time comes for foreign workers to repatriate, many employers wish to continue employing them due to their language proficiency and other skills, but are unable to do so lawfully. Many workers also wish to remain in South Korea. Responding to these desires, in 2011 the government began allowing these workers to remain under a less-rigid visa. However, as it was not easy to meet the conditions for this visa status, in 2014 foreign workers became exempt from the requirement to take a written exam (considered the most difficult part of acquiring technical certification).

Fifth, foreign worker dependency among small- and medium-sized businesses is on the rise and there are signs that they are replacing domestic Koreans in certain areas, such as construction, and may be taking jobs away from native-born women and the elderly. In an attempt to address this, the government in 2009 tried to introduce the employment levy system to impose a fee on all employers who hire low-skilled foreign workers, but this initiative foundered in the face of business opposition. The government is now reviewing the possibility of imposing the levy on workplaces that have operated for ten years or more and have continued to employ foreign workers for five years or more.

Refugees from North Korea

North Koreans represent the majority of refugees in South Korea, although officially they are not considered refugees and are citizens of the Republic of Korea, since North Korea is still considered part of the Republic's territory. The numbers of North Korean “refugees” have been increasing: 947 arriving in 1998, 1,043 in 2001, 1,384 in 2005, 2,402 in 2010, and 1,275 in 2015.

Because the border between north and south is heavily guarded, most North Koreans first escape via the Chinese border, then try to defect to South Korea by traveling through countries in the region, including Thailand, Burma, and Mongolia. Some North Koreans enter or attempt to enter diplomatic compounds in China, a tactic China has sought to discourage by increasing border security and forcing North Koreans to return home. Estimates vary widely, but about 100,000 to 300,000 North Koreans are living in or hiding in China.

After North Koreans enter South Korea, the government asks them their reasons (multiple answers allowed) for defecting. Economic well-being has become increasingly important, with 47.6 percent in 2014 citing it as their reason for leaving. Other reasons for defecting included seeking freedom (32.2 percent), accompanying others (21.2 percent), wanting to make more money (21.5 percent), and discontent with the communist regime (18.5 percent).

The North Koreans who successfully reach South Korea receive special assistance to help them settle and adjust to life in the south. This assistance includes an adjustment program, which lasts two months, as well as adjustment capital. The adjustment program is mainly an introduction to South Korea's economic and social systems. North Koreans also receive government assistance to find jobs. Many North Koreans believe they do not receive enough money from the South Korean government to adequately help them.

Attitudes toward North Koreans are shifting as well. When there were fewer North Korean refugees, those who entered South Korea were treated like heroes by the government and the people. As their numbers have increased, with an estimated 26,000 North Koreans living in South Korea in 2012, and as tensions between the two Koreas have heightened, the public has become less enthusiastic.

Naturalization Policy

The easiest way for a person to acquire Korean citizenship is by marrying a Korean or having at least one parent who is a Korean citizen. The number of people naturalizing each year   increased from 232 in 2000 to 26,756 in 2009. In 2010 it dropped to 17,323, due to new restrictions on dual citizenship. Since then this number has held steady at around 17,000 per year.

Many immigrant women marry South Koreans. These women mainly come from other Asian countries, particularly China and Vietnam. In 2015, 6,966 immigrants, or 64 percent of the year's total, were granted citizenship because they had South Korean spouses. The number of marriage migrants—primarily women seeking a better life, who meet their South Korean husbands through marriage brokers—has surged in recent years, from 15,913 in 2002 to 93,786 in 2006, to 144,681 in 2011 and 151,608 in 2015.

The number of people acquiring South Korean nationality through a Korean parent has also increased, from 432 in 2000 to 2,610 in 2015. These are the children of Koreans who migrated to China, Russia, and Japan during the Japanese colonial period. They are entitled to citizenship only if they can show proper documents proving one of their parents was a Korean citizen.

For people with no family ties to Korea, it is still possible to become a citizen, but the path is difficult and few have chosen to pursue it. Immigrants must prove that they have a serious desire to become South Korean citizens. The authorities may require five years of residence, proficiency in the Korean language, and understanding of Korean culture and history. Foreigners must pass an interview that tests their language proficiency as well as a written test on culture, history, and customs.

Koreans Abroad

Economic prosperity has brought higher living standards to South Korea. While emigration is on the decline, some middle-class South Koreans continue to migrate to Asian and Anglophone countries.

In 2015, some 6,858 Koreans went abroad for permanent settlement (mostly to advanced countries). Most of these South Korean emigrants are searching for a better quality of life for themselves and their children. Competition for spots at good Korean universities is fierce. By living in an English-speaking country and attending a university abroad, many South Koreans believe their children will gain a mastery of English that will lead to high-paying jobs abroad or at home.

In addition, life in South Korea is very tough and competitive. For example, South Koreans work the second longest hours compared to residents of other OECD countries. In 2014, South Koreans worked an average of 39.6 hours per week, compared to 34.5 hours in Japan and 33.5 in the United States.

The number of ethnic Koreans abroad obtaining South Korean visas increased sharply in recent years. Overseas Korean (F-4) visa holders, who can stay for an extendable period of two years, grew from 136,702 in 2011 to 328,187 in 2015. They do not need a job contract but can work in almost any employment area, if they choose; however, there is no data available on their employment. Some Overseas Koreans (including from the United States) travel to South Korea to take advantage of the low cost of medical treatment, owing to the nationalized health-care system.

Looking Ahead

The Employment Permit System was internationally recognized in 2011, when South Korea was awarded a first-place United Nations Public Service Award in the category of combating public service corruption in Asia and the Pacific. Myriad improvements are still needed to address remaining issues, including in the areas of the selection process, distribution of foreign workers by sector, abuse and exploitation by employers, and illegal presence of temporary workers.

So far, South Korea has not seriously considered immigrant integration issues, mainly because the foreign-born share of the overall population remains small, and so much of it is temporary. But integration is likely to receive national attention because of the growing number of foreign spouses and the continued presence of—and growing dependence on—temporary workers. With some proposing an increase in foreign workers as a means to address South Korea’s demographic problems rather than as a short-term stopgap to meet labor needs, the importance of immigrant integration will only grow over time. Still, the idea of permanent migration remains an unlikely one in the near term considering that South Korea remains a “one-blood” country.

Sources

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