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Youth unemployment

South Korea‘s youth unemployment rate topped 12% for the first time ever. Since Park Geun-hye became president in early 2013, the government has devised six separate youth job programs and has spent 2 trillion won (US$1.7 billion) a year on the issue, but the job crunch for young people is showing no signs of improving.

If anything, prospects for the future are getting gloomier, as even the chaebol with the capacity to create good jobs are planning to offer fewer jobs to university graduates.

According to its employment trends for February, which Statistics Korea released on Mar. 16, the unemployment rate for young people (15-29 years old) was 12.5%. This was the highest the figure has been since June 1999.

Generally, February is a month in which unemployment figures are higher than other months, as it is when students graduate from university, which increases the number of young job-seekers.

But even taking this into account, the youth unemployment rate this year is bad - even worse than in 2010 (10%), when the South Korean economy was rapidly contracting because of the global financial crisis.

In the month of February, the youth unemployment rate was 8.5% in 2011, 9.1% in 2013 and 11.1% in 2015 - showing a yearly uptick. And there were 560,000 young people seeking jobs last month - 76,000 more than the same month last year.

There were also 18,000 more people with jobs, as the youth employment rate (41.4%) increased by 0.3 percentage points from the previous year (41.4%). This results from a decrease in the proportion of the population who are not engaged in economic activity - people who were not looking for jobs in the first place.

The fact that the rates and unemployment and employment are both rising at the same time means that young people are becoming more proactive about finding work, but that there are not enough good jobs for them to get.

“Young people are often looking for their first job. Since they prefer stable jobs, they spend more time looking for work, which appears to have caused the unemployment rate to rise,” said a source at Statistics Korea.

The sluggish employment indicators for young people show that the government’s job programs are having little effect.

The government has declared that resolving the job shortage for young people is its top priority, and it has pursued a number of policies such as bolstering job training and creating more internships and opportunities for work overseas.

But the results have been subpar, with just 15% of the young people who have taken part in the job programs being hired as regular workers. In order for internship experience and job training to serve as stepping stones to regular jobs, there needs to be a constant increase in good jobs, but that is not what is happening.

The results of a survey released on Wednesday by the Federation of Korean Industries (FKI) that asked the 500 biggest South Korean companies (in terms of revenue) about their plans for hiring new workers in the first half of the year (with 209 responding) show that close to 70% of those companies are either hiring fewer workers than last year or have yet to make any plans to hire.

“We need some extraordinary measures for youth employment,” said Kim Yu-seon, a senior analyst at the Korea Labor and Society Institute. One such measure, Kim said, would be extending the youth employment quota system to the chaebol.

“If companies with more than 300 employees were required to maintain a youth employment ratio of 5%, it would create 140,000 more regular jobs,” Kim said.

Kim also pointed out that there are 3.54 million South Koreans who are working more than 52 hours per week. Reducing their working hours, Kim said, would also create more jobs.

By Kim So-youn, staff reporter and Kwack Jung-soo, business correspondent

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