Most employees at state-run companies in the mid-1990s were only laborers in name; they were technically unemployed because the state was not providing them with rations or wages. The labor market did not exist in North Korea when the country had a functioning planned economy. Residents were simply required to work almost their entire lives in the job that was designated to them by the state. The country’s newly emerging labor market has since rendered this old system obsolete, but there remain some state-run companies that keep their employees for life.
A monthly wage at a state-run company would not even allow an employee to purchase one kilogram of rice and the meager rations of corn and potatoes the state provided was insufficient to survive on. The “Arduous March” of the mid-1990s to early 2000s caused a great deal of economic recession and starvation.
The North Korean government’s employment system has more or less disappeared, and in its place has risen an informal but active labor market ecosystem. These labor markets have become the basis for the country’s economy.
The country, however, still faces numerous economic challenges, including how it will raise the quality of its labor force, whether laborers have the skills that the labor market requires, and how it will deal with the massive rise in its elderly population.
North Korea observers are frequently surprised at the extent to which manual labor still maintains a massive presence in the country. They are also surprised that the North Korean state expresses its hearty support for all of this manual labor.
The North Korean state relies on manual labor to construct railways, houses, roads, power plants, and even to dig tunnels. In North Korea’s mines, male and female laborers are known to lug 20-30 kilogram bags of ore on their shoulders.
Daily NK sources in South Hamgyong Province report that laborers forcibly mobilized in backbreaking physical labor at a power plant construction site in Tanchon, South Hamgyong Province, survive on boiled potatoes. The residents of the area are almost at the point of starvation.
The construction of the power plant is important to the state, so the authorities provide corn and potatoes. However, these provisions are far from sufficient to fill the bellies of manual laborers. Moreover, the chronically hungry laborers are exposed to a number of dangers and there are continued incidents that lead to injuries and even fatalities.
The North Korean authorities employ residents as cheap labor and make little effort to mechanize anything that can be done manually. The state portrays manual labor as something of a duty that patriotic and loyal citizens are required to undertake for the state.
The North Korean state must legalize the informal labor market and allow it to grow so that it forms a strong basis for economic development in the country.
The labor market requires particular skills and education from laborers and can provide good salaries for qualified candidates. North Korean laborers will be encouraged to learn new skills and pursue higher education. Companies will benefit by having a better prepared and highly trained workforce.
A free labor market will transition North Korea away from its low-skilled, manual labor-centered economy to one that cultivates laborers who are educated and skilled, while providing better living conditions for its workers.
North Korea recently emphasized “science education” as a way to create new economic growth at the 3rd Plenary Session of the 7th Korean Workers’ Party. However, there is first a need to create a free labor market that cultivates the talent the market requires, rather than simply compelling workers to satisfy the needs of the country.