[Editorial] Job Upheaval Triggered by AI, Flexibility Needed to Boost Market Resilience

Analysis shows a sharp polarization in youth employment in occupations with high exposure to generative Artificial Intelligence (AI). According to a report titled "Current Status of Occupations Highly Exposed to Generative AI and Recent Youth Employment," released by the National Assembly Budget Office (NABO) on the 26th, hiring of young workers has declined in routine clerical positions but increased in highly skilled professional roles. Jobs with high AI exposure include accounting and bookkeeping, finance and insurance, customer service, writers and translators, and computer software developers.
The employment changes were analyzed from November 2022, when ChatGPT was launched, through the first half of last year. Specifically, employment fell sharply in fields such as accounting and bookkeeping, customer service, and writing, while it increased in occupations related to computers, finance and insurance, and human resources and management. The findings carry several implications. It is somewhat encouraging that, in certain roles, generative AI can complement rather than replace the work of junior employees. However, as AI capabilities advance, more job categories will become replaceable. In that case, companies are likely to cut back on new hiring first, which could deal a direct blow to youth employment.
Government employment statistics from January support this view. Employment fell unusually in professional, scientific, and technical services, a sector believed to have a high share of AI-exposed tasks. The restructuring of the labor market driven by AI is an irreversible trend. NABO noted that clear evidence is still lacking that the spread of AI is the direct cause of job losses, but nonetheless urged active preparation for AI-induced job volatility. The government must accurately grasp market conditions and move quickly to craft countermeasures.
The fear of AI-driven job losses is also stark in "The 2028 Global Intelligence Crisis," the report that recently shook Wall Street. The report, released on the 22nd (local time) by U.S. boutique research firm Citrini Research, is packed with alarming scenarios. It sketches a hypothetical world two years from now, arguing that as ultra-powerful AI tools become everyday essentials, labor and financial markets are thrown into massive upheaval.
In the scenario, a wave of mass unemployment depresses consumption, and companies respond by ramping up AI investment to secure profits. Layoffs intensify, and growing numbers of white-collar workers fail to repay their mortgages. Banks tied to credit card companies collapse, and a turmoil surpassing the 2008 financial crisis erupts in 2028. Even though this was only a hypothetical scenario from a little-known small research firm, the share prices of companies mentioned in the report tumbled. IBM suffered its steepest drop since 2000, and fear spread across the entire U.S. stock market.
The White House dismissed it as something out of a science fiction novel, but the impact of the report cannot be brushed off as a mere episode. Earlier, Anthropic’s Chief Executive Officer (CEO) warned that half of all white-collar jobs could disappear within five years. Wall Street firms such as JPMorgan Chase & Co. have spoken of large-scale employee redeployment plans. For Korea, the urgent task is to first make our rigid market structure more flexible.
Few countries have labor markets as inflexible as Korea’s when it comes to working hours, wages, and contract terms. In a recent comparison of labor law flexibility across countries by the Korea Industry Alliance Forum (KIAF), Korea ranked last among nine nations. It scored 43 points, less than half of top-ranked United States. The score is also far below the nine-country average of 70.61, and lower than manufacturing competitors Taiwan (65) and China (65). Korea’s gross domestic product (GDP) and Gross National Income (GNI) per hour worked are well below the Organisation for Economic Co-operation and Development (OECD) averages, indicating significantly lower productivity. To strengthen our ability to respond to AI-driven change, the labor market must become more flexible.