Labor unions point out the poor conditions of care workers and argue that the BOK’s proposal is not a fundamental solution. (Image courtesy of Yonhap)
SEOUL, Mar. 6 (Korea Bizwire) – In response to the growing care service staff shortage, the Bank of Korea (BOK) has suggested employing foreign workers and applying a differential minimum wage to mitigate the issue, sparking discussions about its feasibility.
Labor unions criticize this measure as a temporary solution, highlighting the need to improve the conditions of already struggling domestic care workers and enhance the public nature of care services.
During a report titled “Easing the Shortage and Financial Burden of Care Service Workforce” released on March 5, the BOK anticipated a continuous increase in demand for health and childcare services due to an aging population and more dual-income households.
The supply of labor in care services is failing to meet demand, with the shortage expected to grow from 190,000 in 2022 to between 380,000 and 710,000 by 2032, and further to between 610,000 and 1.55 million by 2042.
To address the inability to meet demand with domestic workers alone, the BOK proposed adding care services to the employment permit system and setting a relatively lower minimum wage for the sector.
The employment permit system allows employers facing labor shortages to legally hire foreign workers from 17 countries under a non-professional employment visa (E-9) but is currently restricted to industries like manufacturing, agriculture, construction, and some services.
Applying different minimum wages based on nationality would violate International Labour Organization (ILO) conventions. To reduce the cost of foreign care services without breaching ILO agreements, the BOK suggested allowing individual households to directly hire foreign workers through private contracts or reducing the minimum wage for the care sector.
Currently, households hiring domestic workers privately are not subject to minimum wage laws, but wages are typically set higher than the minimum wage.
Sector-specific minimum wage application is legally possible under the current Minimum Wage Act, which states that wages can be determined by type of business.
However, reaching an agreement on different minimum wages is challenging due to significant disparities between the business and labor sectors, making discussions on reducing the minimum wage for the entire care sector difficult due to potential worsening conditions for domestic care workers.
Labor unions point out the poor conditions of care workers and argue that the BOK’s proposal is not a fundamental solution.
The Korean Confederation of Trade Unions emphasized the government’s duty to provide fundamental support and alternatives for care workers, while the Korean Confederation of Trade Unions highlighted the already precarious situation of care workers and rejected shifting the problem to migrant workers with even lower wages and worse conditions.
They advocate for revitalizing the community spirit within society and establishing a work environment free from discrimination as the fundamental solution.
M. H. Lee (mhlee@koreabizwire.com)
