The number of people employed in blue-collar jobs saw the biggest decline since the 1998 financial crisis in 2023 due to a slump in manufacturing, data showed.

According to Statistics Korea's National Statistics Portal on Monday, 3.92 million people worked in low-skilled, manual-labor jobs last year, 118,000 fewer than the previous year, representing a 2.9 percent drop.

This is the largest decline since 2013, when Statistics Korea began collecting relevant data on the seventh occupational classification standard. Including the previous occupational classification, this is the largest decline since 1998, when the number of employed people fell by 265,000 during the foreign exchange crisis.

Manufacturing accounts for more than half of the decline in industries. This, coupled with a downturn triggered by sluggish exports, has taken a toll on low-income households, experts say.

Blue-collar jobs defined in the statistics are jobs that do not require specialized skills and are often categorized as low-wage jobs, naturally affecting low-income groups who are in the lower portion of the labor market.

"Because the jobs require little skills and pay less, people who have the lowest skills in the labor market are those who acquire such positions. If such jobs shrink, low-income groups will be hit the hardest," explained Lee Byoung-hoon, emeritus professor in the Sociology Department at Chungang University.

Manufacturing-related low-skilled jobs include simple assembly or labeling of products by hand, which could be easily replaced by automation and robots.

"South Korea is one of the countries that has a high percentage of robotics usage. As companies struggle to cut down on labor costs, the jobs could become defunct," Lee said.

"If such a trend turns out to be positive, the overall labor market will improve, where the number of better quality jobs requiring high-skilled workers and offering higher pay will increase. However, if it not, it will put (such workers) in a position where the only job opportunities they have are taken away," he added.