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Characteristics of Employment in the Manufacturing Industry and a Review of Job Creating Subsectors

Author Gil, Eunsun Date 2021.07.12 Issue No 116
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○While overall production of the manufacturing industry has contracted due to the COVID-19 pandemic, total employment levels have not undergone a major adjustment.

- Unlike the service industry, which saw an immediate reduction in employment, the manufacturing industry has more-or-less maintained the scale of its employment. This property of manufacturing employment has served as a buffer against short-term production shocks and has helped limit the negative spillover effects on the labor market.

- Generally, employment in the manufacturing industry is not sensitive to short-term economic downturns. However, when the production outlook deteriorates for the longer term, major reductions in employment follow. Once large-scale restructuring occurs, industrial employment seldom rebounds thereafter.


The manufacturing industry offers jobs for the middle class, allowing a decent salary in exchange for working long hours.

- Of particular note, labor income for workers in their 20s and 30s is higher compared to what is offered in other industries.


To boost job creation in the manufacturing industry, this study proposes independently classifying relevant manufacturing subsectors as ‘job creators,’ independent of and distinguished from existing sectoral categorization as ‘new industries’ or ‘leading export industries.’ Job policies in the private sector should thus target these job creators, identified as such for their high potential to produce net employment growth.

- To wit, there exist some segments of the manufacturing sector that record consistent gains in employment even as overall employment growth in the industry appears stagnant.

- Among export-oriented industries in particular, those that manufacture chemicals, pharmaceuticals, and medicinal chemical products are expected to see a net increase in the number of quality jobs.

- Industrial sub-segments where strategies for job creation in manufacturing can be implemented include the electrical equipment, special-purpose machinery, precision instruments, fabricated metal products, rubber and plastics, and food and beverage sectors. These are non-core industries that mainly supply the domestic market.

- Sectors that produce materials, parts and equipment as well as the bio-health and food and beverage sectors can be categorized as job-creating manufacturing industries.

- In the meantime, in order to prevent the kind of massive job losses that occurred in the steel industry in 2013 and the shipbuilding industry in 2017 it is critical to improve industrial competitiveness with a long-term perspective and proactively manage industrial restructuring risk.