An analysis said the number of employed people this year will increase by only 100,000 from a year ago. That is nearly half the figure projected at the end of last year.
According to labor groups on the 7th, the Korea Labor Institute (KLI) projected in its "Assessment of the labor market in the first half of 2026 and outlook for the second half" that the number of employed people this year will increase by 103,000 from a year earlier. That is about half of the 210,000 projected in December last year.
Although there are projections that this year's economic growth rate could reach 3%, it means that will not translate into an increase in employment. The institute said, "The composition of growth is concentrated in semiconductors," adding, "Semiconductors lift the overall growth rate, but the employment-inducing effect is limited, and the overall employment trend is determined by the domestic demand and non-semiconductor institutional sector, which has a large employment share." It added, "Whether employment improves in the second half depends more on the substantive recovery of the domestic demand and non-semiconductor institutional sector than on the economic growth rate."
The institute also projected the annual employment rate this year at 62.7%. That is 0.2 percentage point lower than last year. By contrast, it raised the unemployment rate over the same period from 2.8% to 2.9%. If the institute's outlook materializes, the employment rate will fall for the first time in six years since 2020, when COVID-19 hit. A simultaneous decline in the employment rate and rise in the unemployment rate has occurred only four times since the 2000s: in 2003, 2009, 2018 and 2020.
The institute said, "Stabilizing the consumption base to prevent further deterioration in employment and preparing support measures for groups highly exposed to employment shocks, such as young people and those in their early 60s, are urgent." It added, "For young people, delayed entry into the labor market can lead to future losses in wages and career," noting, "We need to induce new hiring by corporations and seek ways to provide job opportunities linked to vocational training to supplement the shortage of private-sector jobs."