Last year, Korea's economic growth rate was tallied at 1%. The number of people in their 20s and 30s who marked "took a break," meaning they did not even engage in job hunting, reached 717,000, the most on record. A similar situation first occurred in Japan 20 years earlier. They are the 17 million "employment ice age generation" who entered society from 1993 to 2004 after the bubble economy collapsed.
Recently, the Bank of Korea (BOK) released a report saying Korea should revisit the experience of Japan's ice age generation as local youths face delayed employment and heavier housing costs. It said fundamental measures are needed to avoid a scenario in which many who failed to secure proper jobs in their youth become middle-aged and older as is, burdening the national economy.
◇ Look-alikes in "low growth, job scarcity and nonregular work, falling marriage and birth rates"
In its report, "Assessing the lifetime impact of delayed labor-market entry and housing-cost burdens among the young," the Bank of Korea (BOK) said, "Japan's employment ice age generation experienced a period of high unemployment due to a prolonged recession and then faced negative effects across their lifetimes, such as job instability and income declines, which carries significant implications for Korea."
Japan's ice age generation graduated between the early to mid-1990s and the early to mid-2000s and are now in their 40s and 50s. Until the 1980s, when they spent their teenage years, Japan's economy grew at an annual average in the 4% range, but in the 1990s, growth plunged to around 1%. In 1997, the Asian financial crisis hit. A deep freeze swept Japan's job market.
In Korea as well, the issue of young people marking "took a break" began to surface around 2020, when the economic growth rate slowed sharply. Korea's average annual economic growth rate, 4.9% in the 2000s and 3.5% in the 2010s, fell to 1.8% in the 2020s. Last year's growth rate came in at 1%, the lowest in five years.
Korean corporations are also moving to defer or scale back new hiring. According to The Federation of Korean Industries, 62.8% of large corporations in the second half of last year answered that they "had not set a plan for new hiring or had no hiring." As of December last year, the number of job openings per job seeker through the government employment platform Employment 24 was just 0.39.
Both Japan and Korea have seen a decline in regular jobs considered decent positions. Japanese corporations reportedly reduced lifetime-employment-style hiring during the employment ice age and rapidly increased nonregular employment. As of Aug. last year, the share of nonregular workers among Koreans in their 20s and 30s was 31.7%, the highest in 21 years since 2004.
Japan's "ice age generation" and Korea's "took a break generation" also share a tendency to avoid marriage, leading to lower birth rates. In Japan, a neologism—"parasite single," referring to unmarried adults living with their parents—became popular. In Korea these days, the term "full-time child" has begun to spread. These are young people who do housework such as cleaning, laundry and dishwashing while receiving an allowance from their parents.
◇ Ice age generation in middle age, Japan's government: "We are hiring rookie civil servants born in 1966"
When a generation is excluded from the labor market, medium- to long-term losses occur across the national economy. As labor input falls, productivity declines and potential growth itself can weaken. Income losses among those who failed to secure proper jobs lead to reduced tax revenues and higher social security expenditure burdens. Ultimately, a chain effect of fiscal deterioration occurs.
In fact, Japan's ice age generation continues to face low wages even now in middle age. While the average wage of all general workers in Japan rose by 6,600 yen from 2012 to 2017, wages for the employment ice age cohorts aged 40–44 and 45–49 fell by 3,500 yen and 9,400 yen, respectively. The Bank of Korea (BOK) said, "This is because they frequently changed jobs in their youth and failed to gain opportunities to build capabilities through in-house training."
Failing to solve the problem when the ice age generation were young, the Japanese government is belatedly rolling out various policies for them in middle age. Former Prime Minister Shigeru Ishiba said in Jun. last year, "As the employment ice age generation enters middle age, issues such as poverty in old age, housing insecurity and household vulnerability have become real challenges, not future risks."
Accordingly, the National Personnel Authority recently said, "We will conduct the 2026 national civil service examination to hire 150 people born between Apr. 2, 1966, and Apr. 1, 1986." The aim is to give the ice age generation, who are nearing retirement age, at least a last chance at employment.