Employment among those 15 and older hit an all-time high last month since statistics have been compiled. But the employment rate for those ages 15-29 fell for the 16th straight month, extending its slump. As the labor force participation rate among older adults continues to outpace that of young people, the job market's "generation reversal" persists.
According to the August employment trends released by Statistics Korea on the 10th, the number of employed people ages 15 and older last month was 28,967,000, up 166,000 from the same month a year earlier. It marked eight straight months of increases of at least 100,000. The employment rate for those ages 15-64 also rose 0.1 percentage point (p) from a year earlier to 69.9%, the highest since statistics began in 1989.
However, by age group, job conditions for young people remain weak. While the employment rate for all age groups rose from a year earlier last month, the youth employment rate fell 1.6 percentage points. The youth unemployment rate also rose 0.8 percentage point from a year earlier last month.
The trend is even more pronounced when looking at the drop in the number of employed. Among those ages 15-29 last month, the number of employed decreased by 219,000 from a year earlier. For August, the decline is the steepest since the foreign exchange crisis (August 1998).
The number of young people who reported "took a break" fell for the fourth straight month, but the number of people in their 30s who reported "took a break" hit a record high. The government said this appears to reflect a base effect from the sharp increase in the number of people in their 20s who reported "took a break" last year, as well as the impact of that group aging into their 30s.
Weak conditions in manufacturing and in accommodation and food service businesses, which employ many young people, are cited as reasons for the poor youth job market. Manufacturing jobs have fallen for 14 straight months, and jobs in accommodation and food service businesses, after decreasing in May-July, were flat last month. Even with the distribution of livelihood recovery coupons, job growth did not materialize. In addition, large companies' preference for hiring experienced workers has reduced hiring of new college graduates.
Experts point to a "mismatch" between the jobs young people want and the jobs actually increasing as the biggest problem. Lee Byung-hoon, a sociology professor at Chung-Ang University, said, "The problem is a shortage of jobs that meet the expectations of highly educated young people," adding, "There is a need to support employment by retraining young people after graduation or expanding tailored jobs."
In response, the government plans to push aggressively to create jobs favored by young people through an AI great transition and the "super-innovation economy 30 leading projects." It also plans to simultaneously strengthen tailored employment services for young people who are seeking jobs or who reported taking a break, and to train youth AI specialists.
Meanwhile, as older adults participate more in the labor market, the generation reversal in the economically active population continues. Last month, the labor force participation rate among those 60 and older was 48.4%, up 0.9 percentage point from a year earlier. Since June, the labor force participation rate for older adults has surpassed that of young people for three straight months. Statistics Korea projected, "As the older population increases and their willingness to participate in the labor market aligns, this trend will continue for the time being."
Given the situation, the government is moving to launch full-fledged discussions on extending the retirement age to back older adults' willingness to work. But young people fear an extension could crowd out job opportunities for them.
In a survey conducted 4th by the Korea Enterprises Federation (KEF), 61.2% of young respondents said extending the retirement age would negatively affect youth hiring. Experts also note that while extending the retirement age would increase employment for older adults, it would inevitably have the side effect of reducing youth employment.
The government recognizes that extending the retirement age could negatively affect youth employment and says it will draw up countermeasures. An official at the Ministry of Economy and Finance said, "We will prepare a generational co-prosperity-type plan to extend the retirement age and expand jobs for both older adults and young people."