In May this year, the number of unemployed college graduates topped 500,000 again for the first time in five years. Despite what is described as a record semiconductor boom and rising exports, unemployment among college graduates is reverting to the level seen during the COVID-19 crisis.
According to the Ministry of Data and Statistics (MODS) on the 11th, the number of unemployed people with a college degree or higher in May this year was 503,000. It surpassed 500,000 for the first time in five years since 2020 (546,000) and 2021 (541,000), when unemployment surged during the COVID-19 crisis. In 2022 (464,000), 2023 (428,000), 2024 (463,000), and 2025 (443,000), unemployment among those with a college degree or higher was in the 400,000 range.
The causes can be broadly analyzed in three parts. First, the semiconductor industry does not have a large job-creation effect. Recently, semiconductors have accounted for more than 40% of Korea's total exports, but they account for only 4% of total manufacturing employment. In other words, the semiconductor boom is structurally not translating into more jobs.
Also, in May this year, the number of manufacturing jobs fell by 140,000 from May last year. This was the largest drop in 7 years and 3 months since February 2019 (down 151,000). Analysts say employment weakened as exports declined in industries with high employment multipliers (the number of jobs induced directly and indirectly when final demand of 1 billion won occurs), such as automobiles and machinery. The employment multiplier for automobiles (5.41) and manufacturing (4.85) is about three times that of semiconductors (1.86).
Along with this, the spread of AI adoption appears to have affected the decline in jobs for college graduates. Over the past three years, youth jobs have decreased by 211,000, and 98.6% of that decline was in industries with high AI adoption rates, according to a Bank of Korea survey. Representative sectors with high AI adoption rates include computer programming, systems integration and management; professional services such as legal, accounting, tax, advertising, and consulting; publishing; and information services. Most are occupations highly preferred by college graduates.
On the same day, Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, said at a meeting with relevant Ministers, "Uncertainty in labor market conditions is increasing (due to the war in the Middle East)," adding, "By institutional sector, difficulties for the young are intensifying, and sluggishness by industry, including manufacturing, construction, and agriculture and fisheries, is deepening."