AI Boom Deepens Youth Job Woes
A diagnosis by the Bank of Korea revealed that the threshold for youth employment is rising further as the industrial structure is reorganized around information technology (IT) manufacturing and companies’ preference for experienced workers strengthens due to the proliferation of artificial intelli
The Bank of Korea has identified a rising threshold for youth employment in South Korea, as the country's economy shifts towards information technology (IT) manufacturing and companies increasingly favor experienced workers due to the rise of artificial intelligence (AI). The analysis indicates that structural factors like changes in the industrial structure and the dual labor market make resolving sluggish youth employment challenging through job policies alone.
The Bank of Korea's "Sluggish Youth Employment and Policy Tasks" report, released on October 26, found that while youth unemployment and employment rates have worsened in recent times, they are not yet at alarming levels compared to previous periods. However, qualitative deterioration, such as the increasing proportion of temporary and daily workers among employed youths, has become evident.
This qualitative sluggishness is attributed to a growing tendency for youth to enter the secondary labor market due to stagnant demand in the primary labor market. The primary market features high wages and stable employment, while the secondary market is more open and mobile. South Korea's industrial restructuring around IT manufacturing has limited job creation for regular workers, creating a structural mismatch where economic growth isn't translating into demand expansion in the primary market.
Furthermore, the rapid growth of AI technology is exacerbating the sluggish demand in the primary labor market and shifting the preference towards experienced workers in AI-intensive jobs and industries. This trend is decreasing demand for entry-level and basic tasks typically handled by the youth. The Bank of Korea warns that even if the primary market's demand rebounds, the issue may persist due to insufficient pathways for youth from the secondary market to return.
In terms of industrial policy, the Bank of Korea suggests creating conditions for IT manufacturing growth to spread to related sectors and the domestic demand market, as well as fostering organic connections between education and industry to meet the labor demands of the semiconductor-centered growth and AI era. Regarding labor market structure, the Bank of Korea emphasizes the need to improve employment system flexibility, enabling youth to smoothly enter and navigate the labor market.
Written by urgent.news from BusinessKorea's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
