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(EDITORIAL from The Korea Times on Jan. 12)

All Headlines 07:05 January 12, 2017

Shrinking factory jobs

For the first time in seven years, the number of Korea's manufacturing jobs dropped last month. Labor market data released Tuesday showed that the number of factory workers covered by the state unemployment insurance scheme came to 3,581,000 in December, down 400 from a year ago. The decline marks the first time since October 2009 when the number fell by 8,000 in the wake of the global financial crisis.

Job cuts in manufacturing are attributed to prolonged export slowdown, corporate restructuring and factory automation, and this trend is also supported by an industrial activity report prepared by Statistics Korea. The average capacity utilization in the manufacturing sector remained at 70.3 percent in October, a drop of 3.7 percentage points from a year earlier. The figure improved to 73.5 percent in November but still remains low.

Shipbuilding has been hit hardest by the employment unrest amid a swift restructuring drive. The number of employees in the shipbuilding, railroad and aviation equipment segment dipped to 179,000 in November, down from 210,000 at the end of 2015.

The decline in factory jobs could be a temporary phenomenon, but must not be taken lightly. That's because most manufacturing jobs are stable and well-paying, helping the middle class to build wealth. So the government should not look on with folded arms.

President-elect Donald J. Trump is a case in point. He has been intimidating both American and foreign companies into keeping operations in the U.S. Toyota, the world's largest automaker, has announced a plan to invest $10 billion in the U.S. over the next five years under this pressure, and Korean companies look set to follow in Toyota's footstep.

The problem is that Korean companies' rush to build plants in America will cause our manufacturing sector to hollow out at a faster pace. It's inevitable then that domestic factory jobs will disappear in droves.

True, services industries make up a greater share of employment as the economy matures. Factory automation is also sure to undermine manufacturers' job-creation capabilities. Nevertheless, it's imperative to keep factory jobs to the full until other sectors than manufacturing can offer a sufficient number of decent jobs. This means that Korea still cannot afford to opt out of manufacturing.
(END)

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