Korea can no longer neglect youth jobs

Last year, South Korea saw both the number of employed people in their 20s and the youth employment rate decline. Employment fell for a third consecutive year, while the overall employment rate turned negative for the first time in five years. The drop shows that job opportunities for young people shrank faster than the population itself, underscoring the severity of the youth employment freeze.

Economic growth stagnated at just 1 percent last year, failing to generate sufficient momentum in the labor market. Although the overall employment rate improved, the rise was largely driven by job growth among older workers, creating a statistical illusion of recovery. In reality, newly graduated young people take an average of 11.5 months to secure their first job, reflecting employers’ strong preference for experienced hires.

A functional “career ladder” could ease the concentration of talent in large firms by allowing workers to move from small and midsize companies with ample job openings. Yet only about one in 10 workers actually makes the leap to a large corporation. As a result, terms such as “job give-ups,” long-term unemployed youth who abandon their searches, and adult children living with their parents while unemployed have become common.

Addressing the youth employment crisis requires more than short-term financial support. Low-interest loans or subsidies may alleviate immediate pain, but they do not create meaningful opportunities. Tailored education, vocational training, and job-placement programs are critical, particularly in a labor market transformed by artificial intelligence. Comprehensive policies must also track young workers who have withdrawn from the workforce.

The stakes are high. Prolonged disconnection from the labor market reduces lifetime earnings and widens economic inequality. Youth employment cannot be treated as a side issue or a charitable concern. It must be the top priority of economic policy, ensuring that young people have access to stable, high-quality jobs and a future worth striving for.

The youth employment challenge is complex. To reintegrate displaced young people into the labor market, the economy must recover and the job market regain vitality. Investment should be expanded and regulations on the service sector eased to create more high-quality jobs in large corporations and service industries. Labor policies that focus too heavily on regular positions at large firms deepen polarization between big companies and small and midsize enterprises, leaving young people on the sidelines. When introducing measures such as shorter working hours or extending the retirement age, policymakers must evaluate their impact on youth employment and minimize unintended consequences.

For young people without jobs or income, financial support such as low-interest loans offers little more than a temporary fix. Tailored education, training and job-placement programs are needed to meet the demands of a labor market reshaped by artificial intelligence. Comprehensive measures are also required to assess and address the realities faced by young people who have exited the labor market, including employment prospects, housing, debt and health. Access to high-quality jobs is essential if young people are to envision a future.