Youth employment faces steepest on-year decline since Covid-19 pandemic
More than 250,000 jobs held by people ages 15 to 29 vanished in May as manufacturing weakness, AI disruption and Middle East turmoil pushed Korea's labor market into decline.
A person walks past a job board at a college in Seoul on June 11.YONHAP
More than 250,000 jobs held by young people ages 15 to 29 disappeared last month, the steepest decline since the Covid-19 pandemic, the Ministry of Data and Statistics said on Thursday.
The total number of employed people also fell for the first time in 17 months since the short-lived imposition of martial law in December 2024.
The reality of “jobless growth” is taking hold as employment opportunities for young workers disappear, even when exports and other economic indicators remain buoyed by a booming semiconductor industry.
The number of employed people age 15 and older stood at 29.12 million last month, down 40,000 from the same month in the previous year, according to monthly employment data released by the Data Ministry on Thursday.
It was the first on-year decline in monthly employment since December 2024, when employment fell by 52,000 due to the martial law crisis, and ended a 17-month streak of gains.
The employment rate also slipped 0.5 percentage points from a year earlier to 63.3 percent last month. It marked the second consecutive monthly decline, following a 0.2 percentage point decline in April.
A sign for a career center at a college in downtown Seoul on June 11YONHAP
The latest on-year drop was the sharpest since February 2021, when the pandemic pushed the rate down 1.4 percentage points.
“Employment has shifted into a downward trajectory as the Middle East war drags on and higher raw material costs continue to weigh on the economy,” the government shared in its analysis on Thursday.
Employment is widely viewed as a “lagging” economic indicator, meaning that social events impact the numbers later than other indicators. Officials said that the effects of the Middle East crisis, which began in late February, are only now being fully reflected in labor market data.
Monthly job gains, which had been increasing between 100,000 and 200,000 earlier this year, slowed sharply to 74,000 in April.
Bin Hyun-joon, the chief of the Social Statistics Bureau at the Ministry of Data and Statistics, speaks at a press briefing in Sejong on June 11.YONHAP
By industry, manufacturing accounted for much of the decline.
In May, employment in the manufacturing sector fell by 140,000 from a year earlier, the 23rd consecutive month of decline.
The pace of the decline more than doubled from the 55,000 jobs lost in April. It was also the steepest drop since May 2019, when manufacturing employment fell by 151,000 amid heightened U.S.-China trade tensions.
Despite the chip boom, weakness in industries such as automobiles and food products weighed on employment in the manufacturing sector. Semiconductor-related jobs account for only about 4 percent of total manufacturing employment.
“Compared to other manufacturing industries, semiconductors create relatively few jobs,” said Bin Hyun-joon, the chief of the Social Statistics Bureau at the Ministry of Data and Statistics. “Regardless of the increase in exports, manufacturing employment appears to have declined.”
The spread of AI is also reshaping the labor market.
In May, employment in professional, scientific and technical services fell by 89,000 compared to the same month of the previous year.
The country experienced a six-month decline in the index that began in December of last year. It is the sector’s longest losing streak since a 13-month decline from May 2017 through May 2018. The category includes research and development, legal and accounting services and consulting — occupations generally considered highly exposed to AI-driven disruption.
People stand in front of job postings at a city-run recruitment agency in western Seoul on June 11.NEWS1
The combined detrimental impact of manufacturing weakness and AI-related labor market shifts has fallen disproportionately on youth populations.
In May, employment among people ages 15 to 29 dropped by 255,000 from a year earlier, the largest decline since January 2021, when pandemic-related disruptions erased 314,000 jobs. Also in May, the youth employment rate fell 2.4 percentage points to 43.8 percent, marking its 25th consecutive monthly decline. The drop was the steepest since January 2021, when it fell 2.9 percentage points.
Youth employment declined primarily in information and communications, professional, scientific and technical services and accommodation and food services, according to the ministry. Information and communications and professional services are among the sectors most exposed to AI, and younger workers appear to be bearing a disproportionate share of the disruption.
An analysis by the Bank of Korea found that from July 2022 to July 2025, the three years following the launch of ChatGPT, employment among young workers in AI-exposed industries fell by 208,000 jobs. By contrast, employment among workers in their 50s increased by 146,000.
A similar pattern has emerged in the accommodation and food services sector. Introducing kiosks at restaurants reduced the number of sales and serving staff by 11.5 percent, according to research by the Korea Employment Information Service. But the institution also found that employment among young workers fell by 23.1 percent — more than double the overall average.
“Young people are facing a triple burden stemming from industrial and demographic shifts, employers’ growing preference for experienced hires and the economic fallout from the prolonged Middle East conflict,” a Ministry of Finance and Economy official said.
Finance Minister Koo Yun-cheol speaks during a ministerial meeting in central Seoul on June 11.MINISTRY OF FINANCE AND ECONOMY
“The expansion of AI, combined with rigid labor market structures, is creating a structural transformation,” said Kim Gi-seung, a professor of economics at Pusan National University. “As discussions over extending the retirement age gain momentum, people in their 20s are increasingly being pushed into becoming an ‘Angry Young’ generation in the labor market. Without fundamental structural reforms, such as greater labor market flexibility, it will be difficult to solve the youth employment problem.”
Separately, the government convened a ministerial meeting for employment policy on Thursday, chaired by Finance Minister Koo Yun-cheol.
“All ministries must remain on high alert and mobilize every available resource,” Koo said.
The government is reportedly preparing financial support measures for companies that hire young workers, including the so-called Youth New Deal program in partnership with large conglomerates.
Still, one government official cautioned that uncertainty remains high.
“With the possibility that the impact of the Middle East conflict could intensify, it is difficult to predict either the timing or pace of a recovery,” the official said.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
