Economic Growth Benefits

Introduction

Economic growth is defined as an increase in the amount of goods and services produced and consumed by the national population over a given time period. Growth can be measured in nominal terms or in real terms. For measurement of country 's economic growth, GDP or GNP per capita should be used as these take the population differences between countries into account. Economic growth is always wanted as it can deliver a number of important benefits to an economy. With a higher level of national output with a given population, GDP per capita will be generally higher meaning consumption possibilities are higher. The main benefits are likely to be higher living standards as consumption possibilities expand, greater tax revenue for the

Importing of foreign labour could also be another way in keeping the economy growing to the fullest as it can relieve shortages of labour.

With its fast-aging population, South Korea has gone from a country where labor was the only abundant resource to one seeking foreigners to help run its plants, farms and industries such as clothing and construction. The Korean labour market has been near full employment since the mid 1980s. Unemployment rates have been around 2.5 per cent. For example, in 1995, the unemployment rate was only 2 per cent. With this tight labour market, some industries have found it hard to locate Korean workers and immigrant workers have trickled into the country. The immigration law of the Republic of Korea restrict the admission of foreign workers to a few categories. Legal status is only offered to those who will be engaged in reporting, technology transfer, business, capital investment, education and research, and entertainment, or for employment that is recommended by a government minister. Current immigration law does not allow unskilled foreign labour to enter Korea, except as trainees. The trainee system is originally intended to upgrade the skills of foreign workers employed by overseas Korean firms. As labour shortages became more intensified, the Korean government began to use the trainee system as an instrument to accept

This means releasing local labor supply is the only viable solution to the labor shortage problem. One way to do this is by increasing female labor force participation. This is complicated by the need for supporting infrastructure such as child care facilities.

Meanwhile, to slow down population aging, the government needs to encourage childbirth, which again involves detailed long-term planning. These solutions are viable but visible results would not be seen for years.

For the time being, the widening gap between labor demand and supply will increase wage pressures. This is already happening in the construction sector, where the wages of steel fixers are even higher than white-collar professionals.

Wages for menial jobs like dishwashing have also jumped in recent years. To minimize wage inflation and its impact on profits and growth, employers will have to find ways to raise productivity. (Staff Reporter, Hong Kong, Published on 03/03/2014 Hong Kong