Youth unemployment

COVID-19 has made a dent in youth employment in South Korea. According to the Korea Development Institute (KDI), youth unemployment has decreased in February and March by one percentage point and three percentage points year-on year, respectively. The policy research institute said the situation could get worse from the second quarter of the year, which will cause long-lasting negative damage to youth unemployment. In other words, young job seekers might not be given even a chance to take the first step in landing a job, being caught in a vicious circle where falling demand, production and exports lead to shrinking the job market.

Figures from the Korea Employment Information Service paint a similarly grim picture. Overall job openings went down by 24.5 percent year-on-year in March, with the hospitality and education industries plummeted by 54.1 percent and 42 percent, respectively. Although large companies, financial businesses and public enterprises have been resuming recruiting, the overall situation remains bleak. One out of three companies has cancelled its plan to hire entry-level employees that was planned in the beginning of the year and has cut the total job openings by half, according to a survey by a job search engine site.

Young people staying too long out of the labor market can have a lasting impact on society as a whole. The “lost generation of Japan” is a case in point. Those who were born in Japan between 1970 and 1982 had to encounter a bad job market between 1993 and 2005, and most of them remained marginalized for decades and the fertility rate of Japanese women fell drastically. No matter which country it is, the failure of the youth is highly likely to affect all generations.

Youth unemployment has been put on the back burner despite its urgency and importance as young people lack an organized voice. The government has announced a series of measures to help small businesses and self-employed but no meaningful support for young job seekers. The job stability scheme, which was released last week, included 200,000 jobs for the youth, but the scheme can be implemented only when the third additional budget passes the National Assembly. Given the importance of the matter, the government should not only draw up countermeasures as soon as possible but also expand support details for young job seekers.

Youth employment measures should go beyond solving the problem to provide a solid foundation to create decent jobs in the long run. Despite high unemployment rates, high-tech industries such as the AI, big data and bio-health, are struggling in hiring. The government, businesses and universities should work together to cultivate talent who can work in promising industries such as information technology and bio while reforming both university education and job training in a more practical way.