Foreign companies are leaving South Korea to...
Foreign companies are leaving South Korea to escape rising wages, which have weakened the country’s competitive edge, the nation’s central bank says.
After rapid economic growth between 1986 and 1988, the economy has been hit hard by labor strife. Strikes have mushroomed since 1987, when democratic reforms began allowing labor activism. As a result, wages have risen more than 60%.
“Foreigners are now seeking cheaper laborers in Asian countries like Thailand,” said Im Jae-ho of the Bank of Korea.
The central bank said 111 foreign companies left in the first nine months of this year, compared to 27 in the same period of 1989. Meanwhile, only 177 opened new offices the first nine months--against 254 a year earlier.
“Companies dealing in low value-added goods like garments and shoes seem to want to switch to other Asian countries,” Im said.
Start your day right
Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.
You may occasionally receive promotional content from the Los Angeles Times.
