S.Korea’s chronic disease: Decline in youth employment

The number of young workers in South Korea fell for a sixth straight month in April to its lowest point in more than two years, deepening concerns that Asia’s fourth-largest economy is losing steam for long-term growth.

Overall job growth also slowed last month, Statistics Korea data showed on Wednesday, reinforcing expectations that the central bank may not raise its policy interest rate further.

Employment for Koreans aged 15 to 29 dropped by 137,000 in April from a year earlier, the largest drop since February 2021, according to the data. The number of hired workers in that generation has been steadily declining since November last year.

The youth employment rate dipped 0.6 percentage points to 46%, only higher than the employment rates of those older than 65 and those over 70.

“The government plans to focus on measures to increase jobs in the private sector by innovating regulations on promising future industries and revitalizing the establishment of new companies by youth,” the Ministry of Economy and Finance said in a statement after the release of the jobs data.

SLOWER EMPLOYMENT GROWTH ON FALLING MANUFACTURING JOBS

Despite the job losses among youth, the country added 354,000 new jobs in April from a year before as the number of employed people older than 60 grew by 442,000.

The increase was smaller than a rise of 469,000 in March when job growth rebounded for the first time in 10 months.

The manufacturing sector shed jobs for the fourth straight month, reporting a loss of 97,000, the largest decline since December 2020.

“Growth in the number of workers at manufacturers remains uncertain due to the industry’s downturn led by the IT sector and worries about the potential recurrence of instability in global financial markets,” the finance ministry said.

Korea is home to the world’s two biggest memory chipmakers, Samsung Electronics Co. and SK Hynix Inc. Both have been suffering from weak demand amid a sluggish global economy.

The country averted a recession as the domestic economy rebounded more than expected in the first quarter on the back of strong private consumption, but its outlook remained gloomy due to sluggish exports.

The Bank of Korea is expected to cut its current economic growth forecast of 1.6% for 2023 later this month.

Central bank Governor Rhee Chang-yong, however, has repeatedly said it is too early to suggest starting to cut interest rates as inflation remains above the central bank’s target.

Write to Sang-Yong Park at yourpencil@hankyung.com
 
Jongwoo Cheon edited this article.