Korea needs foreign caregivers

Proactive steps essential to employ migrant workers

Seoul Mayor Oh Se-hoon reiterated the need to introduce foreign caregivers in Korea to address the increasing demand arising from rapid aging and a declining population. However, he clarified his opposition to the notion of applying the minimum wage to foreign caregivers, citing it as “unrealistic” due to the financial burden it would impose. “As (families) need to pay more than 2 million won ($1, 500) per house (in case of employing the foreign workers under the minimum wage system), it would eventually become too expensive,” Oh said on Facebook Wednesday.

The pilot project will kick off this year through a collaboration between the central government and the Seoul Metropolitan Government. But the financial cost will be an obstacle,” he said. Oh’s statement echoes a similar action taken by the Bank of Korea a day earlier, which held a press briefing on “strategies to alleviate labor shortages and reduce cost burdens in caregiving services.”

The BOK introduced a series of measures, including initiatives such as boosting the recruitment of migrant workers and enabling households to directly hire workers on an individual basis, all while circumventing the requirement for minimum wages.

The BOK said the nation is expected to face a shortage of up to 1.55 million caretakers by 2042, primarily for services catering to children and older adults. The disparity between supply and demand in care services has exacerbated financial burdens for those who require them. Last year, employing a caregiver at nursing facilities required an average of 3.7 million won, whereas hiring a housekeeper cost 2.64 million won.

Many women, unable to bear the burden, are forced to choose between quitting their jobs, sacrificing their careers, or taking on the role of primary caretaker at home. This dilemma often leads families to avoid having children altogether. Similarly, family members who must care for their relatives face a similar predicament.

The BOK estimates the economic losses resulting from this will reach 77 trillion won in 2041, equivalent to 2.1 percent to 3.6 percent of GDP. In light of this, we welcome Oh and the BOK’s suggestions to utilize foreign workers for care services.

We can draw lessons from the practices in Hong Kong, Singapore, and Taiwan, where households directly hire workers through private contracts. Reports suggest that they employ caretakers at costs ranging from only 15 to 24 percent of those in South Korea. Meanwhile, Japan and Germany have implemented a work permit system for care workers. In light of these examples, the BOK cited the necessity of refraining from implementing the minimum wage system.

The crux of the problem lies in the evident social conflicts surrounding the issue.

Human rights advocates vehemently oppose the introduction of the foreign caretaker system, labeling it as “modern slavery.” Simultaneously, the labor sector advocates for the equal application of the minimum wage system to migrant workers.

But it is time to adopt a different perspective.

The labor sector, in particular, should acknowledge that the most urgent need for caregivers often arises among the less privileged and minority populations. Unable to bear the expenses, most nursing facilities have been tempted to hire only a minimum number of caregivers, leading to a poor quality of services offered.

There is an urgent need to expedite the introduction of foreign caregivers, considering the rapidly aging population and low fertility rate. Unfortunately, a revised bill aimed at hiring foreign workers for caregiving services failed to gain traction last year. This was primarily due to pushback from the labor sector and civic organizations, compounded by opposition from the main opposition Democratic Party of Korea.

Another bill proposing the differentiated application of minimum wages based on various industries also failed to be passed. Now, the ball is in the court of the government and the political parties. They should respond affirmatively to the seemingly audacious proposal put forth by the central bank.