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Members of the Shinyoung Precision chapter of the Korean Metal Workers’ Union gather outside Shinyoung Precision in Seoul to protest the company’s sudden restructuring and mass layoffs on Jan. 23. (provided by Korean Metal Workers’ Union)

“When our managers made us work without a day off for more than a decade, they always told us we wouldn’t have a job without the company. And now they give us a pink slip right before the Lunar New Year holiday. People say that finding a new job as a woman over the age of 50 is harder than you’d imagine. I don’t know what I’m going to do.”

This is the testimony of a 51-year-old individual surnamed Kim, who got divorced a few years ago and lives with her three sons. Kim worked on the production line at Shinyoung Precision, a subcontractor for LG Electronics that supplies mobile phone cases and partially assembled parts. Kim’s yearly income of 22 million won is the family’s entire source of income, and now even that’s in danger of disappearing.

On Jan. 31, Kim was among the 45 female workers on the production line who were informed by the company of their termination. “It was decided in a general meeting of stockholders to dissolve the company, and we have completed the registration for liquidation,” the workers were told. Since Sept. 2017, the company had been paring back its workforce through three rounds of voluntary resignation, followed by encouraging workers to resign and then laying them off outright.

There have been large-scale layoffs at companies in the mobile phone manufacturing sector like Shinyoung Precision since 2012, but these companies are facing the brunt of restructuring without adequate assistance from the government. An analysis of figures drawn from Statistics Korea surveys about the mining and manufacturing sectors, businesses around the country and the economy as a whole shows that sales in the mobile phone manufacturing sector (based on shipping prices) have been sliced in half (a 45.3% reduction) since 2011, when they hit 63.76 trillion won (US$56.85 million), falling to 56.73 trillion won (US$50.58 billion) in 2014, 40.22 trillion won (US$35.86 billion) in 2016 and 34.88 trillion won (US$31.1 billion) in 2017. During the same period, the number of workers has decreased by 27.5%, representing some 13,000 workers. The drop in sales is comparable to the shipbuilding industry, which is being restructured with the government’s help.

The decline in mobile phone manufacturing

Gapeul Plastic, a subcontractor that had assembled mobile phones for LG Electronics, went bankrupt in June 2016, causing some 180 small companies in the Bucheon area to shut their doors as well. As a result, 150 employees at Gapeul Plastic lost their jobs – not to mention people working for the other companies.

“South Korean electronics parts companies are in the process of moving their factories to other countries where labor costs are lower, just as Japanese and European companies have done,” said Kim Jong-jin, deputy director of the Korea Labor and Society Institute.

The trend can be clearly deduced simply by examining the volume of mobile phones being manufactured in South Korea. Last year, LG Electronics and Samsung Electronics are estimated to have produced around 25 million mobile phones in the country, compared to 136 million phones in 2008, down 80% in just a decade. One of the biggest factors here is the rapid push by Samsung Electronics – which makes more than 300 million mobile phones a year – to move manufacturing overseas to countries such as China and Vietnam during the 2000s.

Another factor is the declining manufacturing volume of mobile phones around the world. According to an LG Electronics business report published in Apr. 2018, the company’s mobile phone production volume has decreased from 82.17 million in 2014 to 57.28 million in 2017. Market research firm Strategy Analytics has concluded that LG Electronics makes about 10 million mobile phones, or around 15% of its total production volume, in South Korea.

The restructuring in the mobile phone manufacturing sector has taken the greatest toll on female workers. Between 2011 and 2017, 2,950 male workers lost their jobs in the sector, compared to 9,786 female workers over the same period. The same disparity appears in the rate of redundancy: 11.6% of men, but nearly half (46.9%) of women.

“Even inside the mobile phone manufacturing sector, it’s easier to hire and fire low-paid female workers than male workers, so they naturally are the first target of restructuring,” said Kim Jong-jin.

In contrast with the shipbuilding and automobile industries, where the workforce largely consists of skilled male workers, the mobile phone manufacturing sector is labor intensive with a lot of low-skilled female workers. Once these women are laid off, it’s hard for them to find another job.

One of the main reasons that the restructuring in the mobile phone manufacturing sector has received little attention is because of a statistical “optical illusion.” Mobile phone manufacturing is part of the electronics industry, and the continuing boom in the semiconductor sector has overshadowed the slump in mobile phone manufacturing and other non-semiconductor sectors of the industry.

“It’s not easy to ascertain the employment situation in the mobile phone manufacturing sector by itself. That’s one reason the restructuring there hasn’t come into the spotlight despite being even worse than in the shipbuilding industry,” said Ma Seong-gyun, who heads up regional industry and employment policy for the Ministry of Employment and Labor.

Labor groups are calling on the government to take action on the issues faced by the mobile phone manufacturing sector.

“A high percentage of female workers in the electronics industry aren’t unionized, which prevents them from speaking with a single voice. While we mustn’t ignore changing trends in the industry, the workers who are losing their jobs are in dire need of employment assistance from the government,” said Pak Jun-do, an activist with a labor group called Workers’ Future.

By Lee Ji-hye and Choi Hyun-june, staff reporter

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