The employment market is showing signs of recovery, but a troubling reality lies behind the numbers. Young people in their 20s, who are most in need of jobs, are being rapidly pushed out of the labor market. From January to August this year, the average number of employed individuals in their 20s was 3.279 million, a decrease of 193,000 compared to the same period last year. This decline is the largest since the Asian financial crisis in 1998, marking a 28-year high. The rate of employment decline among those in their 20s has outpaced the decrease in their population during the same period, making it difficult to attribute the issue solely to a shrinking youth demographic.
When compared to overall employment indicators, the problem becomes even clearer. In August, the total number of employed individuals reached 29.151 million, an increase of 184,000 from a year earlier. The employment rate for those aged 15 to 64 also hit a record high of 70.4% for August. However, the youth employment rate fell to 44.1%, down 1.0 percentage points from the previous year, with 143,000 fewer young people employed. While the overall job market remains stable, young people are not benefiting from this recovery.
More concerning is the fact that the youth employment crisis is solidifying into a structural issue that goes beyond temporary economic downturns. Companies have changed their hiring practices, shifting from large-scale regular recruitment to more frequent and experienced hiring, which has narrowed opportunities for young people entering the labor market for the first time. From the companies' perspective, there is a greater incentive to prefer experienced candidates who can be immediately productive over new hires who require training and development.
Changes in industrial structure are also unfavorable for young people. Continued employment struggles in manufacturing and construction, coupled with the rise of artificial intelligence (AI) and digital transformation, are altering entry-level jobs in office and information technology sectors. There is a growing risk that the very concept of 'entry-level' positions, which traditionally allowed individuals to gain experience and develop into skilled professionals, may diminish.
Delays in securing first employment can have lasting impacts that extend beyond months or years. A late entry into the labor market results in lost opportunities to build experience and delays in wage growth. Without income, young people may postpone significant life events such as marriage, childbirth, and home ownership. This youth employment issue is linked to declining birth rates, sluggish domestic demand, and falling potential growth rates.
The government has introduced measures to address youth employment, but the focus of these policies needs to be clearer. Simply increasing short-term jobs to boost employment numbers is insufficient. It is essential to broaden pathways for young people to enter the labor market, gain experience in private companies, and secure long-term employment. Efforts should be made to reduce the burden of hiring and training on companies, ensuring that internships and vocational training lead to actual employment. Policies connecting workforce development and hiring in growth industries such as AI, semiconductors, biotechnology, and energy are also necessary.
Companies must also adapt. If all companies are only seeking experienced candidates, where will these candidates come from? Someone must provide young people with their first opportunity. Hiring new employees and nurturing talent should not be viewed solely as a cost but as an investment in future competitiveness. The government should not only appeal to companies to hire young people but also focus its policy efforts on creating an environment where businesses can invest and hire effectively.
The record decline in youth employment, the largest since the Asian financial crisis, should not be taken lightly. While the employment shock of 1998 was a product of an economic crisis, the current situation is a complex structural issue intertwined with demographic changes, industrial transitions, and shifts in hiring practices. The most critical form of welfare for young people is ultimately employment, and youth jobs are vital for South Korea's future growth. The numbers that the government should focus on now are not the 184,000 increase in total employment but the 193,000 decrease in youth employment. Expanding pathways for young people to re-enter the labor market must become the top priority of current employment policies.
* This article has been translated by AI.
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