Employed people in their 40s, the core of consumption and employment in the Korean economy, fell for the 41st consecutive month.
According to the Korea Data Agency (formerly Statistics Korea) Korean Statistical Information Service (KOSIS) on the 21st, the number of employed people in their 40s last month was 6,154,000, down 9,000 from a year earlier. It has been declining for 41 straight months since July 2022.
After falling for 67 consecutive months from November 2015 to May 2021, the number of employed people in their 40s edged up slightly but has since returned to a prolonged decline. People in their 40s account for 21.2% of all employed. This is the lowest level for November since 1995.
The biggest reason for weak employment among people in their 40s is "population decline." The population in their 40s last month fell by 129,000 from a year earlier. As the population is shrinking faster than the number of employed, even an optical illusion has emerged that makes it appear the employment rate (80.7%) is rising.
Sluggish manufacturing is also cited as a major factor behind the contraction in employment for people in their 40s. Employment in manufacturing, where the share of workers in their 40s is high, has fallen for 17 consecutive months. There is also an assessment that employment stability has deteriorated sharply as large companies lowered the age for voluntary retirement to the 40s, citing reasons such as the introduction of artificial intelligence (AI).
As employment contracts, spending by households where the head is in their 40s is also declining. According to the household trends survey, the growth rate of consumption expenditure in the third quarter of this year for households of two or more nonfarm households with a head in their 40s was only 1.4%. This is the lowest level in nine quarters since the second quarter of 2023.