Semiconductor exports are hitting record highs, yet jobs are disappearing. According to the Ministry of Statistics, the number of employed workers stood at 29.12 million in May, down 40,000 from the same month last year.
It was the first year-on-year monthly decline since December 2024, when employment fell by 52,000 as consumer sentiment froze in the aftermath of the emergency martial law declaration. Manufacturing shed 140,000 jobs — the steepest drop in seven years and three months — while youth employment fell by 255,000, the largest decline since the COVID-19 pandemic. The employment picture is deeply troubling.
The prolonged war in the Middle East, which has kept oil prices elevated and pushed up raw materials costs, has weighed heavily on manufacturing jobs. Industries with strong employment multiplier effects — automobiles, chemicals, and rubber and plastics — have taken the hardest hit. External factors are clearly at play. But the freeze gripping youth employment is more complex. The drop in youth workers is more than six times the overall employment decline, and it shows no sign of being temporary. Youth employment fell by 147,000 in March, 194,000 in April and 255,000 in May — the losses accelerating with each passing month.
The impact of AI cannot be ignored. Employment in professional, scientific and technology services — a category that includes research and development, consulting, and legal and accounting work — fell by 89,000. AI is taking over routine tasks, reducing the need for entry-level hires.
The more fundamental problem is that growth and employment are moving in opposite directions. Exports reached $87.75 billion in May, a record high on a monthly basis and a 53.2 percent increase from a year earlier. Semiconductor exports also set an all-time record at $37.2 billion, jumping 169.4 percent. Riding the AI boom, semiconductors now account for more than 40 percent of total exports — yet semiconductor workers make up only about 4 percent of all manufacturing employees. Strong growth is simply not translating into more jobs.
That gap is likely to widen. As AI advances and physical AI and robotic automation spread further, the divergence between growth and employment could deepen considerably. That is precisely why the government cannot afford to rely on cash handouts or short-term fixes. A structural response is needed.
Young people being shut out of the workforce at the very age when they should be building experience is not just a personal hardship — it is an enormous national loss. Without jobs, young people cannot build income or assets, and the long-term consequences extend to marriage and childbirth as well. A recent Bank of Korea report found that the share of people in their 20s and 30s who rank in the bottom 20 percent for both net assets and income nearly doubled, from 7.9 percent in 2020 to 15.2 percent last year. Youth employment must be placed at the center of policy so that young Koreans can work and build a future with hope.
