The Bank of Korea: "Industrial Robots Act as a Constraint on Real Wage Growth"

Publication of the Bank of Korea Survey and Statistics Monthly Report on the 27th

[Asia Economy Reporter Jang Sehee] A study has found that industrial robots, by replacing workers in their respective industries, constrain the rise in real wages.

According to the report titled "The Impact of Industrial Robot Adoption on Employment," published in the Bank of Korea's Monthly Survey of Economic Statistics on the 27th, during the period from 2010 to 2018, a one-unit increase in robot penetration in an industry was estimated to increase the number of workers in that industry by about 0.1 percentage points, while the real wage growth rate decreased by approximately 0.3 percentage points.

The adoption of industrial robots in South Korea is gradually increasing. According to the International Federation of Robotics (IFR), the number of operational robots, which was only 38,000 units in 2000, rose to 300,000 units in 2018, an increase of about eight times.

In particular, the highest proportion was in the electrical and electronics sector (32.2%), where labor compensation costs are high, followed by chemicals (15.4%), transportation equipment (11.0%), and machinery equipment (9.1%). The Bank of Korea explained that robot adoption results in opposing effects: a decrease in labor demand and the creation of new tasks.

The Bank of Korea also analyzed that since 2010, robot penetration has rapidly progressed in industries such as automobile electronic components and computers.

The report anticipated that the role of robots will continue to expand steadily in the future due to technological advancements in robotics, artificial intelligence (AI), and information and communication technology (ICT). The research team forecasted, "Following the COVID-19 pandemic, digital transformation has accelerated, and robot adoption will proceed even more rapidly."

Finally, the research team emphasized, "To expand job opportunities, it is necessary to actively discover new high value-added industries so that productivity gains from robot adoption can lead to job creation," and added, "It is important to increase labor mobility between sectors."

This content was produced with the assistance of AI translation services.