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Jobs must come before real estate

Published: 04 May. 2026, 00:02

Lee Sang-ryeol

The author is a senior editorial writer at the JoongAng Ilbo.

President Lee Jae Myung warned two years ago, as he sought reelection as leader of the Democratic Party, that advances in science and technology would sharply raise productivity while inevitably reducing labor demand. He predicted a polarized labor market divided between a small group of highly skilled workers managing AI systems and a much larger group of marginalized workers competing with machines.

That warning is beginning to materialize. Signs are mounting that Korea is entering what could be described as an era of mass unemployment.

A jobseeker takes part in a counselling session at a job center in Seoul on Nov. 6, 2024. [YONHAP]

In the first quarter of this year, the number of unemployed exceeded one million. The situation is particularly severe among young people. A total of 1.71 million people in their 20s and 30s are not employed, including those officially unemployed, those who have stopped job hunting and those preparing for employment. That accounts for 14 percent of the population in that age group, or roughly one in seven. The figure approaches levels seen during the Covid-19 pandemic in 2021 and 2022, when economic activity was sharply curtailed.

What makes the current situation more troubling is that it has emerged despite a relatively stable economic backdrop. The economy has largely returned to normal operations, and the stock market has been strong, with the Kospi approaching the 7,000 level. Yet job creation has not kept pace with economic indicators.

Three factors are commonly cited as causes: the disruptive impact of AI, a downturn in manufacturing and a growing preference among companies for experienced hires over entry-level workers.

The government is unlikely to be unaware of the seriousness of the issue. However, its recently unveiled “youth New Deal” program falls short of expectations. While it promises to provide a “new starting line” for 100,000 young people, only 23,000 positions involve practical work experience. Many of these are short-term or administrative roles, including 9,500 temporary jobs to assist the National Tax Service in collecting overdue taxes and 4,000 positions to survey farmland ownership and use.

Past experience offers a contrast. During the Asian financial crisis in the late 1990s, unemployment also exceeded one million. At the time, many workers in their 40s and 50s were forced into early retirement. The government responded by organizing computer training programs at universities nationwide, at a time when personal computer literacy was still limited. Equipped with new skills, many of these workers started small businesses and adopted point-of-sale systems, improving competitiveness in the self-employed sector and helping to overcome the employment crisis.

The limitations of government-led job creation are evident. Ultimately, it is businesses that generate sustainable employment. North Chungcheong illustrates this point. Its youth employment rate in the first quarter reached 48.1 percent, higher than Seoul's 46.2 percent and Gyeonggi's 44.9 percent. The difference reflects the presence of semiconductor, biotechnology and secondary battery plants in cities such as Cheongju, Eumseong and Chungju.

Even so, the number of quality jobs offering competitive wages and benefits remains far from sufficient. The heads of the country’s top 10 conglomerates have pledged to hire 51,600 people this year, but only 34,200 of those positions are for new graduates, highlighting the structural imbalance.

Despite these challenges, President Lee has continued to focus on real estate issues, even posting on social media during a recent trip to Vietnam about problems with long-term capital gains tax deductions. Housing policy is important, but employment is of a different order. Jobs are tied not only to livelihoods but also to human dignity. Youth unemployment, in particular, casts a shadow over the future of families and society.

People attending a lecture on unemployment benifit eligibility are seen at an employment welfare center in Mapo District, western Seoul on Nov. 12, 2025. [NEWS1]

Extraordinary circumstances require extraordinary measures. Addressing the employment cliff should be a top priority. Strong incentives should be offered to companies that expand hiring, especially for entry-level positions. Such measures are likely to be more effective than short-term public-sector jobs or government-led training programs, which often fail to result in lasting employment.

A broader policy shift is also needed. Current labor policies, including legislation such as the so-called “yellow envelope law” and proposals to extend the retirement age, focus heavily on protecting existing workers. Rising labor costs can push companies to relocate production or replace workers with automation.

Creating conditions in which businesses can operate more freely, without excessive regulatory burdens or rigid labor demands, is essential. Effective employment policy must begin with enabling companies to create jobs and invest with confidence in long-term growth.

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.