[Korea] Permanent payroll falls for first time in 26 years as youth job crisis deepens

In South Korea, permanent payroll fell for the first time in more than 26 years in May. The news highlights a deepening employment crisis among younger workers as demographic decline, industrial restructuring and the early impact of AI hit hiring, Aju Press reports.

According to the Ministry of Data and Statistics, in May the number of permanent employees stood at 16.74 million, down 7,000 from a year prior. 

This reportedly marked the first year-on-year decline since December 1999, when the economy was still bearing the burden of the Asian financial crisis.

Permanent employees, in South Korea, are wage workers expected to remain employed for at least one year and are widely regarded as the closest proxy for stable, regular employment.

The May payroll fall brought to an end a 316-month expansion streak which had continued without interruption since January 2000, even weathering the pandemic.

Statistics show that the drop was concentrated among younger age groups, with the number of permanent jobs held by people in their 20s falling by 164,000 from a year earlier. Those held by workers in their 30s declined by 34,000. 

The combined loss of 197,000 was the steepest decline since December 2020, when the labour market was under severe pandemic pressure.

The government has reportedly stopped short of directly attributing the slowdown to AI. Officials have stated that employment typically lags broader economic conditions and that earlier shocks this year may now be filtering through to hiring decisions.

In addition, the Ministry of Economy and Finance cited the prolonged Middle East conflict as a growing risk, bringing higher raw material costs and heightening uncertainty for businesses.

At an emergency economic headquarters meeting and a meeting of economy-related ministers on June 12, Deputy Prime Minister and Finance Minister Koo Yun-cheol said, "We will place the highest policy priority on improving employment conditions for young people and make every possible effort." 

The minister added that the government would closely analyse employment trends by age group and industry, implement immediate measures where necessary and pursue broader institutional reforms over the medium and long term.

Source: Aju Press

(Quote via original reporting)

In South Korea, permanent payroll fell for the first time in more than 26 years in May. The news highlights a deepening employment crisis among younger workers as demographic decline, industrial restructuring and the early impact of AI hit hiring, Aju Press reports.

According to the Ministry of Data and Statistics, in May the number of permanent employees stood at 16.74 million, down 7,000 from a year prior. 

This reportedly marked the first year-on-year decline since December 1999, when the economy was still bearing the burden of the Asian financial crisis.

Permanent employees, in South Korea, are wage workers expected to remain employed for at least one year and are widely regarded as the closest proxy for stable, regular employment.

The May payroll fall brought to an end a 316-month expansion streak which had continued without interruption since January 2000, even weathering the pandemic.

Statistics show that the drop was concentrated among younger age groups, with the number of permanent jobs held by people in their 20s falling by 164,000 from a year earlier. Those held by workers in their 30s declined by 34,000. 

The combined loss of 197,000 was the steepest decline since December 2020, when the labour market was under severe pandemic pressure.

The government has reportedly stopped short of directly attributing the slowdown to AI. Officials have stated that employment typically lags broader economic conditions and that earlier shocks this year may now be filtering through to hiring decisions.

In addition, the Ministry of Economy and Finance cited the prolonged Middle East conflict as a growing risk, bringing higher raw material costs and heightening uncertainty for businesses.

At an emergency economic headquarters meeting and a meeting of economy-related ministers on June 12, Deputy Prime Minister and Finance Minister Koo Yun-cheol said, "We will place the highest policy priority on improving employment conditions for young people and make every possible effort." 

The minister added that the government would closely analyse employment trends by age group and industry, implement immediate measures where necessary and pursue broader institutional reforms over the medium and long term.

Source: Aju Press

(Quote via original reporting)