Week 11

S. Korea's labor productivity growth slows steeply

Maeil Business Newspaper
May 6, 2013
http://vip.mk.co.kr/news/view/21/20/998847.html

Summary:

Labor productivity growth, which has driven the growth of the South Korean economy, has rapidly lost steam. In particular, labor productivity in the service sector has failed to close the gap with advanced economies, and thus the government urgently needs to implement policies to address the issue. Real per-capita gross domestic product (GDP) of Korea increased sevenfold from the level of 1970s to $27,157 ($21,482 in nominal terms) over 2010~2011, the report said. But per-capita GDP growth slowed to 4.4 percent, about one third of the level of 1970s. The report breaks GDP growth down into labor productivity, working hours, employment rate and working-age population growth.

Opinion:

Compared to the United States' labor productivity growth, that of the Korea across sectors averaged 6.0% between 2002 and 2007, below 7.9 percent of the US between 1978 and 1983. In the same comparison, Korea's service industry labor productivity growth showed a relatively smaller gap with Japan's. As I learned in Economics class, productivity plays a significant role in a country's economy. Especially, labor productivity greatly affects the economic growth in a nation. I hope Korea's labor productivity growth will be accelerated. Therefore, its economy can recover and thus rapidly develop.