No future for a brain drain country

A country abandoned by the young, rich and talented cannot have a future.

Lee Sang-ryeolThe author is a senior editorial writer of the JoongAng Ilbo. “Hell Joseon” was a popular term in Korea among the young generation about a decade ago. In an article in January 2016, the Washington Post highlighted the phenomenon of young Koreans calling their country “hell” and looking for ways out. Common people in their 20s and 30s envied those born with a “golden spoon” in their mouths who set their life course for top universities and secured jobs while they, fed with a “dirt spoon,” had to plow through low-pay, long-hour irregular jobs to barely keep up a living.

Today, the conditions are even worse. While housing prices soared to unreachable levels, decent-paying and secure jobs became more scarce. The epitome of the dreary life for the young is the world’s lowest birthrate. The country’s total fertility rate hit 0.76 — the lowest ever — in the first quarter.

The rich are also leaving. According to the Henley Private Wealth Migration Report 2024, Korea joined the top 10 list in the highest projected net millionaire outflows. This year, Korea is expected to set a record net loss of 1,200 high-net-worth individuals with an investable wealth of $1 million or more.

Korea came at No. 4 in the projected net outflow, following India’s 4,300, the United Kingdom’s 9,500 and China’s 15,200. Net outbound migration doubled from 400 in 2022 to 800 last year, and is expected to add another 50 percent this year. The rich’s exodus from China under the draconian Xi Jinping regime and the depressed British economy in the wake of Brexit are understandable. Henley & Partners assumed the mounting aggression from a nuclear-armed North Korea could have scared the rich, as the country is trailed by Russia engaged in a war with Ukraine.

The rich could have varying reasons for leaving, but killer taxes in wealth and inheritance could have played a part in their decision. Destinations drawing millionaires around the world — such as the United Arab Emirates, the United States and Singapore — offer much lower taxes than Korea.

It is not just the wealthy. High-tech talents also are moving out. A microchip engineer professor said he was surprised by what he heard from his acquaintances working in big-tech companies while attending a symposium in Hawaii. They had been getting requests from employees in Samsung Electronics and SK hynix for visa recommendations. Recruitment offerings by American big-tech giants like Google, Microsoft and OpenAI are too enticing to pass by, they said. The salary for a recruit with a PhD degree in microchip engineering starts at about 300 million won ($215,905). Thousands can be added to the paycheck for someone with credentials from Samsung Electronics. An AI professional could get over 1 billion won in the first year.

No company in Korea can match such high salaries. American big-tech companies are that eager to lure talents.

They are stealing away Korean talents plus technology knowhow. One Samsung Electronics executive said the company can somehow check if employees go to China after they leave, but it cannot do much about those who move to U.S. competitors like Micron.

Generous salaries may not be the sole bait to win over high-tech talents from Korea. The young and talented also may not want their children to experience the same heavily competitive environment in education and work they had gone through.

There is no chance for global competition if we lose talented people. The ominous signs already show. Kim Ki-nam, president of National Academy of Engineering of Korea, declared the United States and Taiwan as winners in the first round of the AI chip race. According to the Ministry of Science and ICT assessment in 2022, Korea attained just 78.8 percent of the United States’ AI technology level while China achieved 90.9 percent of the U.S. level. The gap could have widened this year. The academy and industry fear subordination to the U.S. AI power.

A country abandoned by the young, rich and talented cannot have a future. The reward, employment, taxation and education systems that can persuade them to stay are too outdated and should be entirely redressed. A resource leak in a country with a thinning population cannot be reversed unless its systems are radically overhauled. But politicians are carefree, only engrossed with their immediate interests. They are committing a grave negligence of duty.