South Korean shipbuilders are facing a serious manpower shortage with the industry recovering after a long hiatus. The shipbuilders are supposed to build a much larger number of ships starting from the second half of this year, but skilled subcontract workers are showing no signs of returning after the large-scale restructuring in the mid-2010s.
The number of subcontract workers in the industry dropped from 133,346 to 51,854 from December 2015 to February this year. According to the Korea Offshore & Shipbuilding Association, the shortage is estimated to reach at least 9,500 in September. It is mainly because of an extremely high intensity of labor and a wage close to that in the general manufacturing sector.
The other reasons include shipbuilders’ cash flows. Those companies have been in the red for years and a number of new shipbuilding processes are yet to start. In addition, most of their contracts are heavy-tail and the price of thick plates has risen a lot. In short, they are in no position to pay more to subcontractors.
The companies are mentioning an exemption from 52 work hours per week as a solution. However, the Korea Labor Institute points out it is no solution and what is really necessary is a work environment attractive to young workers. According to industry sources, shipbuilders will have to pay more to subcontractors in the end and they need to guarantee that the mass layoffs will not be repeated.
