‘Lost decade’ possible for South Korea as employment prospect dims among young job seekers

Landing a full-time job, climbing up the corporate ladder, complaining about higher-ups and being constantly bothered by team dinners is what 28-year-old Jang Hyeon-seok has dreamed of since graduating college in 2017.

But the closest he has ever been to these dreams was just a three-month-long internship at a marketing startup last summer. Jang said he has submitted applications to hundreds of companies for a full-time job, but all he received were emails starting with “We are sorry to inform you.”

“It looked so easy to find a job and work like a slave for countless hours every day, and I usually spent time contemplating what job to choose as opposed to how to land one,” Jang said, calling himself as a “loser.”

“Last year’s job search didn’t turn out successful, so I have no option to continue living with my parents. They nag me all the time, so I don’t even go outside my room that often.”

Jang is one of many jobless Koreans in their 20s and 30s who are facing increasingly limited prospects for the future as Korea undergoes a prolonged period of slow expansion.

That trend accelerated with the start of coronavirus pandemic, as companies locked their doors to new hires and stayed conservative in face of diminishing business outlook. The job hunt accordingly became extremely competitive.

According to a Korea Economic Research Institute survey of 4,158 college students and graduates in October, 55.5 percent of respondents said they do not expect to land a job in the coming months.

Close to 76 percent of respondents said finding a job became more challenging than a year earlier, with many of them citing fewer number of openings for full-time jobs and internships.

As such misfortunes continue, Korea suffered the worst job loss in 22 years in 2020, as the number of those employed dropped 218,000 from a year earlier to 26.9 million.

The largest annual job loss on record was 1.27 million jobs in 1998 when the Asian financial crisis took a harsh toll on the economy.

And in the face of such hardships, more and more people are giving up on the idea of landing stable employment, resorting to part-time jobs and short, temporary gigs to earn income, however small it may be.

“This is going to be my third year of searching for a job after college, but I came across only a handful of job openings from my dream employers in the last recruiting season,” said a 27-year-old job seeker surnamed Nam who graduated college as a finance major in spring 2019.

“I’m really disappointed and frustrated with how the job situation is going for me. At this point, all I want is a job that can pay me just enough to survive.”

According to Statistics Korea data, the number of those in their 20s and 30s who did not actively search for jobs reached 731,000 people last month, up 31 percent from the same month a year earlier.

With such trend in force, experts worry that Korea may have entered the vicious cycle of economic setbacks and employment loss like Japan did since the 1990s. They believe young job seekers in Korea today could be a “lost generation” for years to come.

After the economic bubble popped and stagnation started then, young job seekers in Japan born in the 1970s and 1980s failed to find stable jobs for more than a decade, contributing to a large fall in household income and the employment rate.

The struggling job situation prevented Japan from recovering its GDP to the level of its prime days for years. It took 12 years for Japan’s GDP to recover to the same level as it was in 1995.

“The employment situation for the younger generation is expected to deteriorate across industries due to public health risks overseas and the subsequent global economic letdown,” said Joseph Han, a researcher at the Korea Development Institute, in a report.

“For young adults in the initial stage of entering the job market, the negative impact is not expected to be short-lived.”

Han said these young job seekers will continue to lose ground in terms of income gain and work experience, which will continue to prevent them from developing their careers as their options for first employment remain vastly limited.

Solving this problem is critical in overcoming Korea’s ongoing economic difficulties, he said, as their performance in the economy is key to solving socioeconomic issues stemming from aging population and low birthrate.

“There is an increased need for the government to step in to minimize the long-term effect of the financial burden increasing on the whole country due to aging population,” he added.

As a means to prepare young adults to be ready for the job hunt when the economy recovers, some experts are asking the government to create vocational training opportunities and internships and prevent job seekers from remaining idle in the face of frozen employment market.

“The number of those waiting to find employment will continue to grow, and digesting that volume will take years,” said Kim So-young, an economics professor at Seoul National University. “But in the meantime, the society has time to prepare them to gain employment when the time comes.”

Kim said the local job market will not recover until the country successfully overcomes the pandemic, and it will be too much to ask companies with diminished fortune to boost their hiring efforts when they are already struggling to keep the ones they have in house.

Korea saw its real gross domestic product contract 1.1 percent last year due to lingering impacts of the COVID-19 pandemic on domestic demand and exports. The Ministry of Economy and Finance expects the country’s real GDP to grow 3.2 percent throughout this year.

“Not much can be done during the pandemic to create more full-time jobs for young job seekers at this point, but we should be prepared,” Kim added.

“Economic recovery must be prioritized, and that itself will naturally open doors for companies to revamp their hiring efforts to make up for their losses during the pandemic.”