[Reporter's Notebook] A chance to stand back up, instead of welfare dependency

Jul 29, 2026, 09:49 am

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The shadow of a day laborer seeking work falls long across a crosswalk near Namguro Station in Seoul, a hub for labor agencies, early on the morning of February 18 last year. / Yonhap News

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Reporter Lee Jeong-yeon, Special Reporting Department

Is South Korea a developed country? Looking closely into various aspects, the answer seems to be both yes and no. While major shopping malls are packed with popular content exhibitions and pop-up stores to stay competitive against e-commerce, many shops in traditional markets still insist on cash only. Although shopkeepers complain, saying, "How can we pay value-added tax when selling a couple of eggplants for just 1,000 to 2,000 won?", the government has pursued support-oriented policies rather than simple crackdowns, recognizing that this grass-roots economy underpinned South Korea's rapid economic growth.

While small business owners can hit the jackpot, those who close down due to poor economic conditions, fast-changing trends, or other reasons often incur debt, leading them to seek high-income sectors where recovery is possible in a relatively short period. The construction industry is a prime example. The problem is that while labor agencies, which served as a job supplier for the working class, remain stuck in past illegal practices, these citizens are being pushed out of the labor market.

Industry insiders explain that with construction sites already rife with the employment of undocumented immigrants free from minimum wage and health insurance obligations, the government's indiscriminate application of the four major social insurances—such as employment/industrial accident insurance and health insurance—is causing local workers to be replaced by undocumented foreign workers. When the Ministry of Health and Welfare expanded social insurance coverage from workers employed 20 days or more per month to those working 8 days or more, vulnerable workers reluctant to expose their income or undergo insurance deductions became unable to work more than 8 days at a single site.

When I visited a labor agency in Seoul unannounced for reporting last year, local Korean workers were lined up from early morning. It was a scene that instantly debunked the industry's claim of a labor shortage. They turned back simply because there was no work, yet their motivation to work was extremely high as they had families to support. This is why it is difficult to readily agree with the argument that foreign workers should be trained due to a lack of domestic labor. The people I met directly demanded, "Rather than strengthening social security, revive the economy and boost citizens' home purchasing power to increase work opportunities."

A greater issue is the long-term unemployment among middle-aged men. Just as there is concern over discouraged youth, the growing number of vulnerable people losing their motivation to work due to prolonged unemployment is a very serious social signal.

Experts point out that for immigration to benefit our economy, it should not replace the jobs of vulnerable groups, but rather transition domestic workers in those sectors to higher-level occupations or attract high-value-added industries. The argument for bringing in immigrants simply because a job is hazardous also raises questions about its ethics and sustainability. What is clear, however, is that restructuring the system in a way that deprives the vulnerable of opportunities to stand back up and forces them to rely on welfare, without immediate transition measures, could instead weaken the economic structure itself. While innovation increases the safety and productivity of dangerous duties through the adoption of AI processes, we must tighten our grip on job restructuring, re-education systems, and improving policy accessibility for them. The labor agencies I visited in person actually looked like excellent policy promotion venues to resolve the labor mismatch problem.

Ultimately, as more vulnerable people lose their motivation to work and leave the labor market, a vicious cycle will ensue where no amount of government spending can revive the bottom-tier economy. The government must find ways to correct and normalize such labor market distortions. If clear measures for local employment stability are not presented in the working-class labor market where job conflicts between locals and foreign nationals are intensifying, polarization will deepen even further. Elaborate policy design is urgently needed so that working-class citizens on the verge of downward mobility can stand back up.

Lee Jeong-yeon

#Welfare #Social safety net #Economy