Korea's economy is growing sharply on the back of strong semiconductor exports, but jobs for young college graduates are shrinking. According to Statistics Korea and other sources, per capita gross domestic product (GDP) this year is projected to reach $39,164, up 7.6% from last year — the largest increase since 2021. If a strong won-dollar exchange rate provides additional support, it could exceed $40,000. Yet the state of youth unemployment lurking behind chip-driven high growth is no cause for celebration. According to the Korean Statistical Information Service, the number of unemployed college graduates in the second quarter of this year stood at 481,000, the highest in five years. Of these, people in their 20s and 30s accounted for 309,000, or 64% of all unemployed college graduates. The serious gap between economic growth and youth employment is a cause for concern.
The bigger problem is that this phenomenon may be a structural change driven by the spread of artificial intelligence (AI). The National Assembly Budget Office forecast that Korea's AI adoption rate would rise from the current 6% to 50% in a decade, the highest level among major countries. From a corporate standpoint, using AI to boost productivity is inevitable, but the rapid automation of entry-level tasks could significantly raise the barrier for young people entering society. In fact, the number of unemployed college graduates with no work experience reached 56,000 last quarter, an increase of 7,000 over the past year. There is a strong concern that the "scarring effect" — in which delayed employment brings long-term disadvantages in wages and career — will constrain their lives.
Even if Korea's economy enters an era of "$40,000 national income," it would be problematic if this leads to a reality of shrinking jobs for young people. Even now, the country must pay attention to the new jobs and industries that the AI era will create, and generate quality jobs for young people. To do so, it is essential to accelerate labor reforms that make employment and wages more flexible, and to fundamentally overhaul rigid hiring practices and an employment evaluation system centered on seniority and academic credentials. In particular, the government must redesign youth employment support policies away from simple subsidy payments and toward AI education, digital job training, and connections to new-industry workplaces. Companies, too, must expand job-focused hiring and retraining programs and increase industry-academia cooperation to give young people more opportunities to build practical experience.
