Chip-led growth, AI erode youth job quality: BOK

Korea's economy, driven by the semiconductor industry, is facing a crisis as the rise of artificial intelligence and rigid labor market regulations are deteriorating the quality of jobs for young people, according to the Bank of Korea (BOK). The central bank's analysis of workers aged 15 to 29 reveals a concerning trend: as economic growth fails to create sufficient stable employment opportunities, more young job seekers are opting for temporary or daily work instead of pursuing regular positions.

The BOK defines regular employment as the primary labor market and temporary/daily work as the secondary market. Since 2023, young people have increasingly turned to the latter, adjusting their expectations as the primary market continues to struggle with hiring. The report attributes this decline in job quality to a combination of factors, including shifts in the industrial landscape, the advancement of AI technologies, and inflexible employment arrangements.

One major issue is the growing disconnect between the sectors fueling the economy's growth and those offering regular employment opportunities. While information technology (IT) manufacturing has emerged as a stronger growth driver, the mismatch between these high-growth sectors and the sectors providing stable jobs is becoming increasingly apparent.