Thanks to a semiconductor boom, there is a strong chance that per capita gross national income (GNI) will top $40,000 this year for the first time on record, but the number of employed young people (ages 15–29) fell for the 46th straight month in August. That is the longest stretch since the global financial crisis.
◇ Overall employment rose, but youth employment fell
According to the Ministry of Data and Statistics (MODS) on the 9th, the number of employed people ages 15 and older last month was 29,151,000, up 184,000 from a year earlier. It has risen for three straight months since June. By age, it increased mainly among people in their 30s and those 50 and older, and by industry, it rose mainly in health care and social welfare services.
By contrast, the number of employed young people (ages 15–29) was 3,428,000, down 143,000. It has fallen for 46 consecutive months since Nov. 2022. This is the longest decline since the 62-month drop from Nov. 2004 to Dec. 2009 during the financial crisis.
Not only are there fewer employed among the young, but the number of unemployed has also been steadily increasing. While the total number of unemployed last month decreased by 4,000 from a year earlier, the number among the young rose by 11,000. The youth unemployment rate was 5.4%, the highest for August in four years since 2022 (5.4%).
◇ Growth led by semiconductors, which create few jobs... Office and professional roles are replaced by AI
The youth employment cliff persists because the economy is improving around artificial intelligence (AI)–related industries, which have a low job-multiplier effect. According to analysis by the Bank of Korea, the employment inducement coefficient of the semiconductor industry is 1.86, lower than the manufacturing average of 4.85.
Given this, the Korea Development Institute (KDI) projected that the employment elasticity, which shows how much jobs increase when Korea's economy grows this year, will be 0.24, the lowest since 2018 (0.13).
There is also analysis that as corporations adopt AI in their operations, demand has decreased for office and professional staff typically handled by new college graduates. Last month, the number of unemployed with a college degree or higher was 342,000, up 12,000 from a year earlier. During the same period, unemployed high school graduates decreased by 2,000, and unemployed middle school graduates fell by 13,000.
This trend is not unique to Korea. U.S. labor research firm Burning Glass Institute recently said in a report, "Job seekers who graduated from college in the United States are facing the worst job market since the 2007 global financial crisis, while the unemployment rate among 22- to 34-year-olds without a college degree has approached its lowest level in the past 20 years."
If young people fail to find a decent job during youth, they are more likely to face difficulties later in accumulating income and asset as opportunities for employment and vocational training decline.
Jeong Ji-un, a senior research fellow at the Korea Research Institute for Vocational Education and Training (KRIVET), said, "We are seeing a phenomenon in which young people who entered the labor market during the pandemic and some born in the 2000s remain in a 'took a break' status into their 30s." The researcher added, "The government should prepare policies by age and gender rather than managing total employment."