Are You Unable to Find Employment?
This morning, I came across an RSS feed discussing a question on HN (Hacker News). On the page, many individuals find it challenging to secure employment in the U.S. despite holding an CS degree (even from Ivy League). Companies are increasingly focused on cutting costs, which has led to a rise in hiring in developing countries like India, Brazil, and Kazakhstan. The sentence from the question resonates with me: “Have you been fired in favor of foreign workers?” Could this happen in South Korea in the future?
High Dependence on the Manufacturing Industry
The primary industry in South Korea is manufacturing, dominated by a few large companies run by Chaebol. Additionally, the portion of real estate in domestic property is much larger than capital investment. This means that the country is highly dependent on exports, with limited domestic demand. Given this structure, facing the uncertainties posed by Donald Trump’s new administration is quite stressful. One of the pressing topics of concern in the economy is “offshoring.” The U.S. government is pressuring many companies, including those in the semiconductor sector in Korea, to invest in the U.S. by establishing their factories there. The policies from the upcoming U.S. government could be detrimental to South Korea’s industry by reducing domestic investment.
Economic Base
The country has struggled to shift its economic base from manufacturing to higher productive industries like IT. Many people continue to cling to traditional sectors without embracing necessary changes. A significant portion of the GDP still comes from manufacturing, largely thanks to semiconductor giants like SK Hynix and Samsung. Interestingly, however, most employment opportunities are emerging from the service industry, not manufacturing.
South Korea also has a high dependency on China and the U.S., and currently, China’s technology has advanced to a level comparable to Korea’s in some sectors. Without technological development, economic growth is bound to decline. Not only that, the significant decrease in population, coupled with housing debt from the unique Jeonse system in South Korea, is exacerbating the economic challenges.
Year of 2025
Due to the president’s impeachment, the current circumstances are filled with uncertainties, and significant changes are expected. Until now, the government has minimized its debt by relying on public enterprises, while housing debt remains unmeasured statistically due to the Jeonse system. I worry that foreigners might begin to recognize the true situation and reconsider the economic fundamentals. However, given the high current exchange rate, I believe they are already starting to become awareness of these issues.