Youth employment rate falls for 23 straight months despite semiconductor boom...Middle East war likely to worsen job market

Financial News reported that youth unemployment continues despite an unprecedented boom in the semiconductor industry. In March, the employment rate for young people aged 15 to 29 was 43.6%, down 0.9 percentage points from the same month last year, extending the decline to 23 consecutive months. In terms of the number of employed youths, the drop has continued for 41 straight months. The youth unemployment rate rose to 7.6%, up 0.1 percentage points over the same period. However, the current employment figures do not yet capture the supply chain shock from the Middle East war, so the job market, which reacts with a delay to economic changes, is likely to worsen in several months.
Youth employment difficulties are becoming structural as they intersect with demographic changes. The biggest factor is that the number of quality jobs in manufacturing, construction, information technology (IT), and services that young people prefer has shrunk amid prolonged economic weakness. Even though the semiconductor sector is enjoying a super boom, its job creation effect is limited. On top of this, reduced hiring of new employees by companies and job substitution through artificial intelligence (AI) are believed to be acting together.
On the 15th, the Ministry of Data and Statistics released the March employment trends report containing these findings.
In March, the number of employed people aged 15 to 29 was 3,422,000, down 147,000 from a year earlier. This is the 41st consecutive month of decline.
On the surface, the job market for those aged 15 and over, including young people, appears strong.
The employment rate for those aged 15 to 64, the comparison standard used by the Organisation for Economic Co-operation and Development (OECD), was 69.7%, up 0.4 percentage points. This is the highest March figure since related statistics began in 1989. The employment rate for those aged 15 and over also rose 0.2 percentage points to 62.7%. The labor force participation rate reached its highest March level since statistics began in June 1999.
However, the latest data do not reflect the situation in the Middle East war. Bin Hyun-jun, Director-General of the Social Statistics Bureau at the Ministry of Data and Statistics, said, "Employment conditions are a lagging indicator, so it takes some time for market conditions to be reflected," adding, "It does not appear that developments in the Middle East have been specifically captured in this employment report."
As of March, the number of employed people was 28,795,000, an increase of 206,000, or 0.7%, from the same period last year. The employment rate was 62.7%, up 0.2 percentage points year-on-year. The increase in the number of employed by more than 200,000 has now continued for two consecutive months.
By age group, employment increased the most among those aged 60 and over, rising by 242,000. The number of employed in their 30s grew by 112,000, and those in their 50s increased by 5,000. In contrast, employment among people in their 20s fell by 167,000.
By industry, the number of workers in wholesale and retail trade and in accommodation and food services declined sharply. Weak employment in manufacturing and construction, due to deteriorating business conditions, also continued.
In particular, the number of workers in wholesale and retail trade, a key indicator of domestic demand, fell by 18,000, marking the first decline in 11 months since April last year. Employment in accommodation and food services also decreased by 2,000, extending its decline for five consecutive months since November last year.
Bin said, "In wholesale and retail trade, the number of employed people had increased for six consecutive months before turning downward this time," and explained, "We believe this reflects industrial restructuring such as unmanned automation."
Manufacturing, which has a high employment multiplier effect, lost 42,000 jobs, marking a decline for 21 consecutive months. Construction shed 16,000 jobs, extending its decrease to 23 straight months.
By contrast, employment in health and social welfare services increased by 294,000. This was followed by transportation and warehousing, which added 75,000 jobs, and arts, sports and leisure services, which gained 44,000.
The number of unemployed people was 884,000, down 35,000 from a year earlier. The unemployment rate fell 0.1 percentage points to 3.0%.
The economically inactive population reached 16,271,000, an increase of 69,000. Among them, the number of people who were "resting"—those not actively seeking work—stood at 2,548,000, up 31,000. By age, the number of people aged 60 and over in this category rose by 96,000, or 8.6%. In contrast, the figure for those aged 15 to 29 fell by 53,000, a decrease of 11.6%.
skjung@fnnews.com Jung Sang-geun and Kim Chan-mi Reporter