Concerns are mounting that the Korean economy is sinking into the quagmire of "jobless growth," as the number of employed people turned to decline for the first time in 17 months despite an unprecedented semiconductor boom. According to Statistics Korea on Tuesday, the number of employed people aged 15 and older last month stood at 29.12 million, down 40,000 from the same month last year. It was the first decline in employment since December 2024 (-52,000), when domestic consumer sentiment froze in the aftermath of the emergency martial law. Minister of Employment and Labor Kim Young-hoon said, "As the war in the Middle East continues, difficulties in the employment field are becoming pronounced," but the larger cause lies in structural problems that make corporate investment and hiring difficult.
Above all, it is painful that the employment shock is concentrated among the youth. The number of employed youth aged 15 to 29 plunged by 255,000 from a year earlier. This is the largest drop since January 2021 (-314,000), when the impact of COVID-19 was significant. The youth employment rate stood at 43.8 percent, down 2.4 percentage points from a year earlier. The government has cited resolving youth unemployment as a key state task, but the employment situation over the past year has only deteriorated. There needs to be reflection on whether, in focusing on creating public-sector jobs for the elderly to boost the total number of employed people, holes have opened in the policies and systems directly tied to youth employment.
The bigger problem is that the longer the "employment ice age" for youth lasts, the more the chronic disease of social polarization may fester. The Bank of Korea on Tuesday analyzed that the proportion of youth in their 20s and 30s among households in the first quintile (bottom 20 percent) in both net worth and income nearly doubled, from 7.9 percent in 2020 to 15.2 percent last year. It is a chilling warning that youth in the blind spots of employment are being incorporated into the lower-income bracket without even having had a proper working life. The surge in non-employed people, including youth, causes income inequality and wealth disparity, becoming a factor that entrenches "compound polarization."
The government's poor employment report card is due to fragmentary policies that merely skirt the issue. While it has put forward various measures such as the Youth New Deal, artificial intelligence (AI) education, job transition support, and the designation of special employment support industries, these are far from a fundamental remedy. Unless the proper approach of "expanding employment through corporate investment" is taken, no remedy will work. The Yellow Envelope Act and the 52-hour workweek system, which block new hiring, must be supplemented, and the policy of uniformly extending the statutory retirement age must be reconsidered. Promising to create new jobs while excessively protecting vested-interest regular workers is nothing more than a hollow "fishing for fish in a tree" policy.
