Labor Force by Occupation in Korea (1995-2006)

of the Korean labor market, the current state of this situation and from there propose appropriate solutions for the coming time.

a. Characteristics of the Korean labor market and the meeting of needs and interests of the Vietnam - Korea relationship in the field of labor cooperation.

Overall, the labor force in South Korea is quite large, currently around 22 million people. The country's workforce is highly skilled and well-educated. Over 73% of the total workforce has a secondary education and 58% has a secondary or higher education. South Korea has the highest proportion of people with doctoral degrees in the total population in the world. Currently, over 87% of the workforce is employed in the non-agricultural sector. In the 1950s and 1960s, with its low wages and long working hours, South Korea became an ideal location for the development of labor-intensive industries. Moreover, the South Korean workforce has a reputation for high-quality work, efficient productivity, and good education. In addition, compared to other industrialized countries, such as the United States, Japan, and Germany, South Korea's wages were considered very low (the average worker's wage was $100, lower than that of India). Coupled with the shift from an import-substitution to an export-oriented industrialization strategy in the early 1960s, South Korea was considered an attractive location for foreign investors at that time.

After a short period of implementing an export-oriented industrialization strategy, the Korean economy began to take off. The rapid economic growth of Korea was accompanied by an increase in workers' wages. Typically, in the early 1990s, the monthly salary of middle managers and professionals was between $1,392 and $1,671, depending on the industry, company, organization, individual, and seniority. Senior managers and executives earned higher salaries, between $4,177 and $5,570. They also received other benefits, such as cars, personal drivers, club memberships, and the freedom to spend certain amounts of company money without having to list each item.

for those expenses. By 2002, the average monthly wage of companies with five or more workers was $1,630, an increase of about 11.2 percent over 2001. Also in this year, the highest wage increase was in the manufacturing sector (22.8 percent), followed by the social services sector (19 percent), much higher than the average increase for the entire workforce (15.7 percent). The increase in wages has significantly improved the living standards of workers, but at the same time it has made Korea no longer competitive in many industries, especially those with high labor content.

In addition to rising wages, the Korean labor market is also experiencing a labor shortage. In 1991, the Korean Ministry of Labor estimated the country's labor shortage at 220,000 manufacturing workers and 30,000 technical workers. Since the beginning of 1992, small and medium-sized enterprises in Korea have been short of workers by an average of 25 percent. Due to the labor shortage and high labor costs, many small and medium-sized enterprises have gone bankrupt, and their international competitiveness has declined. According to the Korean Small and Medium Business Administration (SMBA), through a survey of 1,029 small and medium-sized enterprises with a payroll of 500,000 or more,

- 300 workers shows that the labor shortage rate is about 9.41%. If calculated for all 130,000 SMBAs in Korea, the number of additional workers needed is up to

201,200 people. By 2006, the labor shortage rate was still climbing - it was at 9.36%, compared to 3.98% in 2005.

There are several reasons for the labor shortage in Korea. First, it is due to the influence of the population growth restriction policy. They pursued this policy vigorously, systematically and considered it as part of the overall economic strategy. The Korean government also advocated creating more jobs for women of childbearing age. This has increased the number of women participating in the labor force and at the same time reduced their birth rate. Second, with unemployment at a low of 3.7% during the period 2000-2006, Koreans tend to avoid doing the 3 D jobs (dirty; dangerous; difficult). This has caused the Korean economy to experience a labor shortage, especially in the manufacturing industry. Besides

Therefore, the rapid development of the Korean economy has caused a sharp increase in the demand for labor in industries such as garment, construction, shipbuilding, export production... mainly concentrated in small and medium enterprises, this is one of the reasons why the Korean economy has had to face the problem of labor shortage. Third, the decline in the participation of young labor force in the market and the problem of labor aging. Since the mid-1970s, the participation rate of workers aged 15-19 in the labor market has decreased. In the 2000s, while the average unemployment rate of the whole country was about 3.7%, that of young workers was 7-8%. The main reasons are the time spent in school and the desire to have a high level of education of young people and the decline in opportunities to find part-time jobs. Korea is facing the problem of labor aging. The proportion of workers aged 55 and over increased from 10% in 1990 to 19% in 2005.

To help solve the labor shortage, the Korean government has introduced a program that allows foreigners to enter Korea to work for one to two years, and in recent years the Korean government has suspended the forced departure of foreign workers working illegally in Korea. However, the labor shortage is still becoming more and more serious. According to Mr. Park Soong Hee, Chairman of the Korea Federation of Small and Medium Industries, who acts as a government representative, the labor shortage in small and medium-sized industrial enterprises is very severe. If foreign workers are not allowed to immigrate, a large number of factories will be forced to close or move their facilities abroad.

The question is what kind of labor and what level of labor is lacking in Korea? In the early 1990s, labor shortages were mainly in the material production sector, in SMEs, and with low skill levels. In recent years, especially with the transition to a knowledge-based economy, the demand for high-skilled labor has gradually increased. Therefore, Korea needs to import not only low-skilled labor, but also high-skilled labor.

Thus, Korea has a need to import foreign labor. Foreign countries also have a need to export labor to Korea. Let's compare the average salary of Korea with other countries in the region. While the average salary of Korea in recent years is 1,800 USD, the average salary of a university graduate in the Philippines is only 150 USD, Malaysia 170-250 USD/month, Thailand is 200 baht a day (5.41 USD), or about 162.3 USD/month, Vietnam is much lower. That fact has created a need to export labor to Korea from the above countries. Therefore, it can be said that Korea's need to import labor, especially simple labor from abroad, will be partly met through bilateral labor exchanges with Vietnam and other countries with lower wages. Through that, Vietnam gains certain benefits - solving the employment problem for workers, increasing their income, and gaining a potential source of foreign currency.

b. Korea's policy towards foreign workers

Since 1992, Korea has been accepting immigrant workers. However, according to the Korean Immigration and Migration Law, only skilled foreign workers such as experts, researchers, etc. can work in this country, while unskilled workers are only allowed to participate in the Intern Trainee Program. According to this law, illegal workers in Korea are workers who overstay their permitted period, unregistered immigrants. These people are not only fined, depending on the length of their overstay, but also have to bear all costs related to repatriation.

Korea's immigration policy focuses on solving several major problems: providing incentives for skilled foreign workers, institutionalizing the immigration of unskilled workers, preventing illegal immigration, and facilitating the integration of foreign workers into the Korean community. For legal workers in Korea, including trainees, the government has created conditions for them to enter the country and enjoy many benefits, while being protected by a very strict legal corridor. They are paid adequately.

enough, do not have to pay rent, food and many other expenses and participate in insurance. For skilled workers, the policy is significantly relaxed, because it is considered that this is a very good supplement to the Korean labor market. Their stay in Korea is almost unlimited, and administrative procedures related to entry and residence registration are simplified. As for unskilled workers, the policy is tightened, because it is considered that beyond a certain limit, this force will play a role in replacing domestic workers, which means they will lose their jobs. Therefore, the import of unskilled workers is carried out through the Trainee Program, which is under the management of the Korea Federation of Small Business (KFSB). This agency decides the number of foreign workers allowed to enter Korea through the Trainee Program, allocates them to permitted countries and to industries in need. Currently, 15 countries (including Vietnam) are participating in this program. According to the Labor Standards Law and the Minimum Wage and Industrial Accident Insurance Law, trainees are entitled to health insurance, minimum wage system and industrial accident insurance. Since the maximum period of stay in Korea is 3 years and the risk of losing their jobs is very low, these people are not entitled to unemployment benefits and pensions.

The issue of illegal foreign workers, accounting for about 64% of the total foreign workers, is currently very urgent and controversial for the Korean government. The general view of Korea is not to support the flow of illegal foreign workers, because their presence forces the government to increase management costs, making domestic workers at risk of losing their jobs, and employers have the opportunity to become freeloaders due to reduced costs compared to hiring local workers. Before the 1997-1998 crisis, the Korean government often applied fines and forced repatriation to illegal workers. After the crisis, the Korean government considered labor market reform as one of the four main areas of the economic recovery program, aiming to increase the flexibility of this market and meet the needs of the labor market.

requirements of the modern economy. To more effectively address the issue of illegal foreign labor, the Labor Permit Law was passed by the Korean National Assembly on July 31, 2003, and approved by the President in September 2003, with two main contents: the Labor Permit Mechanism and solutions for classifying and accepting foreign workers residing illegally in Korea. In the spirit of this Law, since August 2004, foreign workers in the Korean labor market have worked under the same conditions and enjoyed the same benefits as local workers. On that basis, many policies related to immigrant labor in general and illegal labor in particular have been and are being amended, creating new opportunities for businesses exporting labor to Korea, including Vietnam.

c. Current status of Vietnamese labor export to Korea

To solve the employment problem for workers, since the 1980s, the Vietnamese government has exported labor abroad. In addition to the traditional labor export markets such as Libya, Iraq, Lebanon, Arabia, Yemen, the former Soviet Union and Eastern Europe, Vietnamese laborers have been exported to a number of countries in the East Asian region such as Japan, Taiwan, Singapore, Malaysia, Laos, South Korea, etc.

Compared to other countries in the region, the governments of Vietnam and South Korea have paid early attention to developing cooperative relations on labor. In the early 1990s, many Korean businesses came to Vietnam to learn about investment policies and the use of Vietnamese labor. Some companies from the two countries signed many labor contracts and sent about 2,500 workers to work in South Korea on fishing boats, transport ships and construction sites of Korean companies in Libya.

Table 2.10: Vietnamese workers in Korea (1995-2006)

Unit: person

Year

Number of employees
1995	5,674
1996	6.275
1997	4,880

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1,322
1999	4,518
2000	7,316
2001	3,910
2002	1,190
2003	4,336
2004	4,783
2005	12.102
2006	9,000

1998

Source: Department of Overseas Labor Management.

Korea is one of the markets that attracts the most Vietnamese labor export. Since 1993, there have been about 60,000 Vietnamese workers in Korea, of which over 40,000 work in small and medium enterprises and about 6,500 are fishing boat crew members. In 2006, Korea received about 102,000 foreign workers. Of which, the work permit program received 70,000 workers and the trainee program received about 32,000 people. Thailand has the largest number of workers under this program with 11,000 people, followed by the Philippines with 10,000 people and Vietnam with 9,000 people. The number of Vietnamese workers sent to Korea for training has increased significantly from 5,674 in 1995 to 7,316 in 2000 and 9,000 in 2006. This army of exported workers has brought in a significant amount of foreign currency, supplementing the country's foreign currency revenue. This year, Korea has not allocated a quota for receiving workers, but has based it on the market's ability to receive them. According to the Overseas Labor Center (Ministry of Labor - Invalids and Social Affairs), it is likely that in 2007, there will be more than

6,000 Vietnamese workers go to work in this market.

Vietnamese labor exports to Korea are mainly in the form of industrial trainees or interns. This is a program for foreign workers working in Korea managed by the Korea Federation of Small Business (KFSB), applied since 1993 to solve the shortage of labor in industries.

dangerous, difficult and toxic (3D) industries, with low salaries, which local workers do not want to do. Statistics from the General Statistics Office show that Vietnam ranks third (after China and Indonesia) in the number of trainees allocated by the KFSB. Normally, the average salary of each Vietnamese worker in Korea is about 750 - 1200 USD/month . A fairly attractive salary for Vietnamese workers, especially those from rural areas looking for work, those with low education levels mainly looking for labor-intensive jobs.

Table 2.11: Labor by occupation in Korea (1995-2006)

Unit: person, %

Industry

Number of employees	Proportion
Industrial	42,105	74.78
Build	1,954	3.47
Transportation	5,495	9.76
Agriculture	214	0.38
Forestry	0	0.00
Trade and services	0	0.00
Aquaculture	6,514	11.57
Air	24	0.04
Medical	0	0.00
Other industries	0	0.00
Total	56,306	100

Source: Department of Overseas Labor Management

There are currently 8 Vietnamese companies recognized as dispatching companies, responsible for selecting and sending workers to work in Korea. Those companies are VINACONEX, SOVILACO, LOD, SULECO, TRACIMEXCO, OLECO,

RACODI, IMS. The figures provide us with information on the allocated quota, the number of trainees who have entered Korea, the number who are currently working in the country, as well as the number of workers who have broken their contracts and fled abroad. Through this, it can be seen that the rate of workers who have broken their contracts and fled abroad in Vietnam is

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