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Youth employment continues to decline despite overall labor market improvements

Published: 10 Sep. 2025, 19:16 Updated: 10 Sep. 2025, 19:24

Students walk past a job board at a university in Seoul on Sept. 10. [YONHAP]

Korea’s employment rate reached its highest level for August since data began being collected in 1982, lifted by gains among older workers. But the picture for people under the age of 30 remains bleak, with youth employment falling for the 16th consecutive month.

On Wednesday, the government unveiled new measures to support job seekers, including raising the monthly job search allowance from 500,000 won ($360) to 600,000 won.

The overall labor market remains steady, according to the August employment report released by Statistics Korea on Wednesday. The number of employed people reached 28.97 million, up 166,000 from a year earlier. The employment rate for those aged 15 and older rose by 0.1 percentage points to 63.3 percent, the highest August level on record.

Employers' preferences against young people

Despite the headline figures, the gap between age groups is stark. The number of employed people aged 15 to 29 dropped by 219,000, the largest fall in August since the Asian financial crisis in 1998, when youth jobs plummeted by 695,000. The decline cannot be explained by demographics alone.

The youth employment rate slid to 45.1 percent and now trails that of workers aged 60 and older, whose rate stands at 47.9 percent. Employment among those over 60 surged by 401,000, driving the overall increase.

“The preference for experienced workers and the rise of rolling recruitment have worked against young people,” said Gong Mi-sook, head of the social statistics bureau at Statistics Korea.

The employment boom among seniors reflects demographic changes as the second baby boom generation, born between 1964 and 1974, enters their 60s. Korea’s older population is swelling by nearly 500,000 each month, with longer life expectancy and retirement insecurity pushing more people to stay in the work force.

In August, 48.4 percent of people aged 60 and older were economically active, surpassing the 47.4 percent participation rate of the youth population. Caregiving jobs in particular are rising, with more seniors employed to look after other older people. The health and social welfare sector added 304,000 jobs last month.

Manufacturing and construction struggle

By contrast, industries that traditionally attract young workers remain sluggish. Manufacturing employment fell by 61,000, marking a 14th straight month of decline. Jobs in information and communications fell by 16,000, while the construction sector shed 132,000 positions, its 16th consecutive month of contraction.

“Manufacturing faces mixed signals, with consumer demand and business sentiment improving on one side, but U.S. trade uncertainties weighing on the other,” said Jang Joo-sung, director of manpower policy at the Ministry of Economy and Finance.

As desirable jobs shrink, the number of people reporting they were “just resting” rose to 2.64 million, up 73,000 from a year earlier. Among those in their 30s, the figure reached a record 328,000 in August, up 19,000 from last year.

That increase reflects both a rise in job changes as the notion of lifelong employment fades and the aging of 20-somethings who had struggled to find work, pushing them into the “just resting” category as they move into their 30s. The number of people in their 20s taking a break declined by around 3,000 to 435,000.

Students look over job information at a university job center in Seoul on Sept. 10. [YONHAP]

'First step for jobs'

To address the trend, the government launched a “First step for jobs” initiative, categorizing young people into three groups: those who have temporarily stopped looking, those who want to work and those who are working.

The plan includes building a database to identify 150,000 young people at risk of long-term unemployment. The government will link reclusive job seekers to mental health and daily life support through the Ministry of Health and Welfare, while providing retraining and mentoring programs for those disconnected from career paths.

Job search support for young people is also expanding. The government will introduce a three-stage AI talent track of training, work experience and hiring, aiming to educate 10,000 people and place 2,000 into jobs by 2026. It will also raise the monthly job search allowance to 600,000 won, create a youth savings program and extend job subsidy incentives for companies that hire young workers.

On the legal front, the government will revise the Special Act on the Promotion of Youth Employment to mandate support for graduates immediately after school and require ministries to share information and intervene early. The definition of youth will be expanded from under 29 to under 34. The government also plans to enshrine job experience programs in law to clarify the roles of participants, companies and agencies.

“A healthy cycle where AI transformation and a hyper-innovative economy lead to creating the kinds of jobs young people want will be the key to solving the employment issue with the youth," said First Vice Minister of Economy and Finance Lee Hyoung-il at a task force meeting on Wednesday.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM YEON-JOO [[email protected]]