On the basis of work by a Japanese NGO, Yonhap recently reported that the number of North Korean workers abroad had doubled, to nearly 70,000, placing 30,000 workers in Russia, 15,000 workers in the Middle East, 8,000 workers in China, Africa and Mongolia, and 5,000 workers in Southeast Asia and Eastern European countries, respectively. The paper quoted refugees as reporting that workers officially sent abroad retain only about 10 percent of their pay, with the remainder taken by the regime. So far, so good.
The bombshell was buried three paragraphs in, the claim that North Korea earns $1.2 billion a year exporting labor. A few years back Steph Haggard and I examined this issue in some detail in the context of constructing a balance of payments for North Korea. Our work suggests that this claim is almost surely exaggerated. Just take the reported revenue and divide by the number of workers: it comes to more than $17,000 per worker. Then compare that figure to the local wage rates in the various countries that the North Koreans were supposedly earning these sums. In many cases it implied that the North Koreans were earning large multiples of local wages. Hardly credible for the sort of low-skill work (construction, logging etc.) that the North Koreans were supposedly doing, especially when the seasonal nature of some of this work is taken into account. Haggard and I estimated that circa 2005 earnings from labor exports were less than $100 million. Even with a doubling of the numbers of workers claimed in the Japanese NGO study, that is quite a gap in estimates.
