The Korean labor market has been a hot topic of discussion recently, with its severe polarization into large firms versus small and medium-sized companies. As previously discussed, regular employees of large companies account for only 12% of the workers in Korea, leaving small and mid-sized companies struggling with chronic labor shortages. This issue is also relevant to Busan, which is home to many small and medium-sized businesses that face similar challenges in attracting and retaining workers. However, the current state of the labor market in Busan presents unique challenges, such as low wages and job insecurity in the service sector, which is the dominant industry in the city. As a result, it is crucial for Busan to develop long-term solutions to create quality jobs that satisfy both workers and businesses. This article aims to explore the importance of quality jobs in Busan and provide recommendations for policies that can help the city achieve its goal of becoming a hub for high-quality jobs.
The Importance of Quality Jobs
Quality jobs are critical for individuals, businesses, and society as a whole. Research by the Organization for Economic Co-operation and Development (OECD) has shown that individuals who have quality jobs, such as those that provide good wages, benefits, and job security, have higher levels of well-being and job satisfaction. Quality jobs also benefit businesses by increasing productivity, reducing turnover rates, and improving their reputation in the community. Furthermore, quality jobs contribute to a more stable economy and a stronger social fabric, benefiting society as a whole.
In addition to the benefits mentioned above, quality jobs also have a positive impact on the mental and physical health of individuals. A study by the International Labour Organization found that job insecurity and poor working conditions can lead to stress, anxiety, and depression among workers. Conversely, workers who have quality jobs with stable employment, good wages, and benefits have lower levels of stress and better overall health.
Furthermore, quality jobs can also improve social mobility and reduce income inequality. In a society where job opportunities are limited, quality jobs can provide a pathway for workers to move up the socioeconomic ladder and achieve their full potential. This not only benefits individuals and their families but also contributes to a more equitable and just society.
The State of the Labor Market in Busan
The low wages and job insecurity in the service sector, which is the dominant industry in Busan, have been a persistent issue for many years. In 2019, the average monthly wage for workers in Busan was 2.56 million won, which is 8.4% lower than the national average. The service sector, including the hospitality, retail, and MICE (Meetings, Incentives, Conferences and Exhibitions) industries, accounts for a significant portion of the city’s employment, but the average monthly wage in these industries is only around 2.2 million won, which is significantly lower than the national average of 2.75 million won.
The lack of upward mobility in these low-paying industries makes it challenging for workers to advance their careers and secure higher-paying jobs. This, in turn, has led to a brain drain of highly educated and skilled workers leaving Busan for better opportunities in other cities or countries.
The COVID-19 pandemic has exacerbated the challenges faced by the labor market in Busan. The city’s tourism industry, which is a significant contributor to the local economy, has been hit hard by the pandemic, resulting in widespread job losses. According to data from the Ministry of Employment and Labor, the number of unemployed individuals in Busan increased by 7.4% in 2020 compared to the previous year.
These challenges demonstrate the need for Busan to focus on developing policies and strategies that promote the creation of high-quality, stable jobs to improve the well-being of workers and strengthen the city’s economy.
Policies to Promote Quality Jobs in Busan
To further support the recommendation for policies that promote quality jobs in Busan, it is important to note the success of similar policies in other countries. For example, Sweden’s active labor market policy has been effective in reducing unemployment and creating quality jobs. The policy invests in education and training programs that help workers develop skills that are in demand in the labor market. Additionally, the policy provides financial incentives to businesses that create quality jobs, such as those that offer long-term contracts and provide benefits to employees.
Germany’s vocational education and training system is another successful example of a policy that promotes quality jobs. The system provides workers with the skills and knowledge necessary for high-quality jobs, such as those in the manufacturing and engineering sectors. The system is highly valued by both employers and employees, and has contributed to Germany’s reputation as a leader in manufacturing and technology.
Denmark’s “flexicurity” system is also worth mentioning as an example of a policy that balances flexibility for employers with security for workers. The system provides employers with the flexibility to hire and fire workers as needed, while also providing workers with a safety net of unemployment benefits and training programs that help them find new employment.
These examples highlight the potential benefits of policies that promote quality jobs and demonstrate that such policies have been successful in other countries. By implementing similar policies in Busan, the city can create a more balanced and equitable labor market that benefits both workers and businesses.
Challenges and Limitations
The challenges and limitations of implementing policies to promote quality jobs in Busan are multifaceted. For instance, the average monthly wage for workers in Busan is lower than that of other cities in Korea. In 2019, the average monthly wage in Busan was 2.56 million won ($2,163), which is lower than the national average. Additionally, the dominance of low-paying jobs in the service sector poses a significant challenge. According to data from the Korea Tourism Organization, the average salary for workers in the tourism industry in 2021 was only 1.8 million won ($1,518) per month. This lack of upward mobility makes it difficult for workers to move up the career ladder and obtain higher-paying jobs.
Furthermore, the impact of the COVID-19 pandemic on the global economy has been significant, affecting the job market in Busan as well. Many businesses in the city have been struggling to stay afloat, leading to job losses and increased competition for available positions. This economic downturn has made it even more challenging to promote quality jobs in Busan.
Short-term solutions, such as providing jobs with six months of training, may not be sufficient to meet the long-term development needs of the city. Therefore, a more comprehensive approach is required. Creating a strong public-private partnership that involves all stakeholders can help to overcome these challenges and ensure the success of policies that promote quality jobs in Busan. This partnership can work to address issues such as the low salary level and the dominance of low-paying jobs in the service sector, with the goal of creating a more balanced and equitable labor market for all.
Attracting Overseas Companies and Investing in Education and Training
Promoting quality jobs in Busan is a crucial step toward achieving a more equitable and stable labor market. The challenges faced by the labor market in Busan, such as low wages, job insecurity, and a lack of upward mobility, make it difficult for workers to obtain quality jobs. However, policies such as attracting overseas companies, investing in education and training programs, and collaboration between stakeholders can help create a more balanced and equitable labor market. Quality jobs not only benefit workers but also contribute to a more stable economy, reduce income inequality, and improve social mobility. The government, businesses, and other stakeholders must work together to ensure a brighter future for the city and its citizens by promoting quality jobs in Busan.