A society with no newborns, an economy with no new hires

Audio report: written by reporters, read by AI

Lee Jeong-dong 

The author is a professor of the Technology Management, Economics and Policy Program at Seoul National University’s College of Engineering. 

When I sit down with young people, I often hear the same lament: “Where are new workers supposed to gain experience and become experienced workers?” It is as if they are eliminated before they even stand at the starting line. A survey showing that eight out of 10 job seekers cited “a lack of work experience and career development opportunities” as their greatest difficulty reflects this reality exactly. A vicious cycle is trapping an entire generation: They cannot find work because they lack experience, and they cannot gain experience because they cannot find work. 

Professional occupations are no different. Even after passing the certified public accountant exam, the number of unassigned accountants who have been unable to find institutions for their required training has risen to around 600, and in some years, 70 percent of successful candidates remained unemployed. The scene of people who passed the exam staging a protest in front of the government complex plainly shows how inaccessible the first career step has become. The youth unemployment rate is already nearly twice the level of the overall unemployment rate. 

A recent analysis by the Bank of Korea confirms this change statistically. Over the three years since the second half of 2022, 211,000 youth jobs disappeared, and 98.6 percent of them vanished from industries highly exposed to AI. During the same period, jobs for people in their 50s increased by 209,000, and 146,000 of those were newly created in industries highly exposed to AI. This means AI is operating in a way that replaces coding, data research and basic analysis that young workers used to handle, while amplifying the tacit knowledge and management work of experienced workers. The central bank calls this “seniority-biased technological change,” but put simply, it means that “AI pushes away young hands and gives wings to older shoulders.” The calculation for companies becomes simple. Rather than spending money to train inexperienced new workers, it is far more economical to give an AI tool to the experienced workers they already have.

But the danger of this calculation belongs not only to society, but also to companies themselves. Becoming better at the work they already do through AI does not guarantee a company’s future competitiveness. Companies can survive only by constantly challenging themselves in new fields, and new workers are the seeds that form the most basic foundation of that challenge. Not hiring new workers is ultimately a declaration that a company will protect its current position by working harder in the current way. It is also the act of drying up the soil of long-term competitiveness in exchange for short-term efficiency. Today’s efficiency eats away at tomorrow’s foundation. 

The essence of this crisis is speed. The population declines slowly. It takes a generation to recognize the crisis, and another to reverse the trend. By contrast, the collapse of entry-level hiring proceeds quickly and quietly. If companies turn to “experienced workers only” for just one or two hiring seasons, that year’s graduates are left with a gap that follows them for life. A gap before the first job is not simply a loss of time. It is a scar that bends the trajectory of lifetime wages and careers. If population decline is a “crisis of total volume,” the disappearance of new workers is a “crisis of the entrance.” If a society without newborns threatens the existence of a country in the medium to long term, a society without entry-level workers weakens companies, the economy and the community at the same time in the short to medium term. Just as a society that does not have children loses its future, a society that does not hire new workers loses its present. Only the speed is different. Both are issues that change the fate of a nation.

There is a strong sense of déjà vu. Korea’s total fertility rate first fell below the replacement level of 2.1 in 1983, but the birth control slogan “Have only two children and raise them well” continued by inertia until the mid-1980s. It was only after the basic plan on low fertility and an aging society in 2006 that the government shifted toward encouraging childbirth. Since then, more than 200 trillion won ($136 billion) has been spent, but today the fertility rate remains in the 0.7 range. We have already paid a harsh price in the population issue: When the direction changes too late, no amount of funding can reverse the outcome. We do not have the luxury of repeating the same mistake with entry-level workers.

We must change our thinking from the start. Casual suggestions that “universities must change” and “companies must hire more new workers” are nowhere near enough. Now the state must guarantee young people not just basic livelihood support, but their first career opportunity. Welfare in the AI era is not basic income but a “first career guarantee system.” Every young person should be able to gain paid practical experience in public or private projects within one to two years after graduation, and use that experience as a ladder to move on to the next stage. The state takes responsibility for military service. Why, then, is the first career step left entirely to the market? Going one step further, companies that receive subsidies for AI and the digital transformation should be required to hire and train a certain proportion of new workers. The government should not give preferential treatment only to companies that invest in equipment and servers. It should provide larger tax benefits to companies that hire people and create careers. If a company introduces AI with state support and reduces new hiring, that is not innovation. It is generational favoritism. More urgent than expanding factories is expanding careers. 

The state can no longer remain a spectator in the labor market. Labor policy in the AI era is not about managing the unemployment rate. It is about designing a system that provides opportunities so society can reproduce careers on its own. Just as a society without newborns cannot continue, an economy without entry-level workers cannot endure for long. If no seeds are sown, how can any fruit be harvested?

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.