South Korea is projected to face a labor shortage of 820,000 workers by 2033, as the country’s economically active population is expected to begin declining in five years.
According to The Korea Times, analysis shows that from 2023 to 2033, South Korea’s workforce will grow by only 312,000, a dramatic slowdown compared to the previous decade’s increase of nearly 3.2 million.
The report cites the nation’s persistently low birth rate as a key factor behind the shrinking labor pool.
Economically active population to peak in 2029
The report predicts that the number of people in South Korea’s economically active population will reach its peak in 2029 before beginning to decline.
As the population decreases, the number of workers required to sustain the nation’s economic growth target of 1.9% annually will rise sharply.
By 2033, South Korea is expected to face a shortage of 821,000 workers, further intensifying the labor deficit.
Manufacturing and social welfare industries are most affected
The labor shortage will vary across different sectors. According to the report, the manufacturing industry will face a shortage of 123,000 workers by 2033, followed by the social welfare sector, which will need an additional 110,000 workers.
The wholesale and retail sectors are also expected to experience a shortfall of 83,000 workers.
The shortage will not only be confined to lower-skill positions. The report notes that by 2033, South Korea will need an additional 192,000 expert-level workers and 142,000 office workers. This highlights the growing demand for skilled professionals in multiple fields.
Government action needed to address the workforce gap
To combat the projected shortage, the report calls for action from the government. Experts suggest policies aimed at boosting participation in the labor market, particularly among women, older adults, and young people, whose workforce participation rates are lower than those of most other OECD countries.
“There should be policies to encourage more potential workers to join the workforce, as the rate of participation in the labor market among Korean women, older adults, and young people is lower than that of most other countries in the OECD,” said an analyst from the research center.
The report suggests several measures, including providing greater support for women balancing work and family, as well as revising labor regulations to allow older workers to stay in the workforce longer.
Increase in foreign workers suggested
In addition to encouraging domestic workforce participation, the report also suggests that South Korea may need to increase the number of foreign workers to fill the gaps. The analyst noted that if the country is unable to activate more potential workers within its population, it may need to look outside its borders for labor.
“The priority should be to activate potential workers in Korea,” the analyst stated. “If that is not enough to fill the labor void, the government may need to consider increasing the number of workers from other countries.”
The demand for foreign workers, especially in sectors like manufacturing and hospitality, is expected to rise in the coming years as the country grapples with its labor shortage.
