[Editorial] Addressing the Worst Youth Employment Crisis Since the Foreign Exchange Crisis Must Be the Nation’s Top Priority

Despite an economic boom fueled by a semiconductor supercycle, the number of employed people in their 20s fell by the largest margin in 28 years since the foreign exchange crisis. The employment rate also dropped below 60% for the first time in five years. Like previous administrations, the current government has introduced various policies to boost youth employment, but they have produced little meaningful effect. As it becomes more difficult for people in their 20s to find work, concerns are growing that young people’s lives are also being destabilized. It is urgent to seek fundamental solutions rather than stopgap measures such as short-term internships.
According to the Korean Statistical Information Service (KOSIS), the number of employed people in their 20s fell by 193,000 from the same period last year through the end of August. This was the largest decline since 1998, when the number fell by 550,000 amid the severe impact of the foreign exchange crisis. The decline was also greater than during the global financial crisis and the COVID-19 pandemic. Youth employment weakness is evident even in the overall employment figures. According to the August employment trends, total employment increased by 184,000, a larger gain than the previous month. However, the number of employed young people fell by 143,000, marking a decline for the 46th consecutive month.
Some argue that the absolute population of people in their 20s is declining, but even after taking that into account, the employment situation remains serious. Through the end of August, the population in their 20s had fallen by 3.5% from the beginning of the year, while the number of employed people in their 20s had dropped by as much as 5.6%. Their employment rate also fell by 1.3 percentage points to 59.1%. It was the first time in five years that the employment rate for people in their 20s had fallen below 60%.
The government has been announcing support measures almost daily. Last month, it announced plans to create more than 300,000 youth jobs by 2030, including 200,000 public and private-sector jobs and opportunities for 100,000 young entrepreneurs. However, critics say the measures—including expanding the age range for youth eligibility and increasing short-term experiential internships—are insufficient as fundamental solutions. Young people have also responded coldly. The recent weakness in youth employment is cited as one factor behind the decline in President Lee Jae Myung’s approval rating among people in their 20s.
Changes in companies’ hiring practices and the emergence of artificial intelligence (AI) are also contributing factors. As companies reduce large-scale entry-level recruitment and focus on hiring experienced workers, young people’s “first jobs” are disappearing. AI’s replacement of entry-level and repetitive tasks has also played a role. The seniority-based pay system and strong protections for regular workers are additional factors. The dual structure of the labor market, divided between large and small and medium-sized companies, is another reason young people give up looking for work. If wage gaps are narrowed and work experience at small and medium-sized companies helps employees move to better workplaces, such companies would not be overlooked as a first job.
Taking these factors into account, the government must urgently pursue fundamental labor reform by easing labor-market rigidity through a shift from seniority-based systems to performance- and job-based systems. It should also provide incentives to companies that increase quality jobs rather than temporary positions. In addition, it must work to create a sustainable job ecosystem by easing entry regulations in new industries. Only labor reform and market revitalization can turn despair into hope. If the government cannot restore a ladder of hope for young people, there will be neither momentum for governing nor a future for the country.