Academic journal article Development and Society

De-Industrialization and the Changes in Occupational Structure in Three East Asian Cities

Academic journal article Development and Society

De-Industrialization and the Changes in Occupational Structure in Three East Asian Cities

Article excerpt

Introduction

Over the last three decades, technological progress and the competitive pressures of globalization have changed the industrial structure and labor market in advanced countries. Although there appear country variations, many developed countries are likely to go through the similar pathway of the industrialization and concomitant occupational as well as social transformations. At the risk of oversimplification, the changes in job structure accompanied by industrialization process can be summarized as follows. In the early stage, as technology advances, the manufacturing industry booms and generates massive employments of skilled work forces. This leads to the growth of better-skilled, middle income jobs. As a consequence, the middle class proliferates, and they demand various services in education, health, and many other areas. The development of welfare states and the public sector expansion also foster the public services sectors. The expansion of higher education and active participation of women in labor market serves to fill those better-skilled jobs and newly created service works. The increase in skilled manufacturing and services employment results in overall occupational upgrading.

As technology progresses further, service sectors employment continues to increase with a corresponding drop in manufacturing employment. Most of advanced countries move into a post-industrial phase of development. The technological advancement and the offshoring of production affect the mid and low-skilled workers in the manufacturing sectors harder. While the needs for the high-skilled, high-paying occupations such as managers, professionals and technicians grow rapidly, together with the skill-biased technological changes, the job demand for middle and low skilled, routine tasks shrinks. The workers displaced from manufacturing sectors face challenges in transferring into skill-biased sectors, as they lack the appropriate knowledge and skills. In addition, computerization encroaches on routine tasks mainly performed by medium-skilled service workers such as office clerks. Those who fail to get skilled jobs find little options but to move into unskilled, low-paying jobs. This leads to job polarization which implies increasing employment shares for both high-skilled and unskilled jobs at the expense of middle-skilled jobs.

Recent empirical researches also reveal that job polarization is not confined to the developed economies. According to the World Development Report in 2016, the developing countries, where the industrialization is still in progress, also experience polarization in their industries. As Rodrik (2015) argues, the discrepancy between high and low skilled jobs in countries like China or India has been aggravated due to their premature transition into the service economies without full maturity in manufacturing industry development. This duality in economy and labor markets complicates their development process, different from that of the developed countries.

In fact, the impact of technological evolution on the labor market and job structure is disputable. Until the late 1990s, there was a consensus favoring the positive impacts of technology on job structure (Bekman et al. 1998), to some extent. And researchers expect technological change may lead to a similar pattern of occupational transformation across countries. Since the early 2000s, however, researchers have concentrated more on the variations in the occupational structures of different countries. Evidence reveals a significant diversity in the patterns of occupational change over time, depending on the timing of industrialization and institutional factors such as welfare regime types, employment policies, etc. (Wright & Dwyer 2003; Goos & Manning 2007; Oesch 2015).

The economy and labor markets in East Asia are in the midst of dramatic structural changes. Particularly Japan, China, and Korea have been undergoing different phases of economic development, and are faced with various challenges in their economic future. …

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