College-educated unemployed top 480,000 in Q2, with those in their 20s and 30s accounting for 64%

The number of unemployed college graduates surpassed 480,000 in the second quarter of this year, reaching its highest level in five years.

Workers in their 20s and 30s accounted for 64 percent of all college-educated unemployed, as a slowdown triggered by Middle East tensions concentrated the labor market's pain on younger workers. The trend was compounded by companies shifting toward experienced hires and a drop in entry-level recruitment driven by the spread of AI.

According to the Korean Statistical Information Service (KOSIS) and employment trend data released Sunday, the number of unemployed people with a college degree or higher reached 481,000 in the second quarter — up 39,000 from the same period last year. That is the highest figure since the second quarter of 2021, when 521,000 were unemployed amid the early stages of the COVID-19 pandemic.

By age group, 179,000 unemployed college graduates were in their 20s and 130,000 were in their 30s. Combined, the two groups totaled 309,000, or 64.2 percent of all college-educated unemployed. Compared with last year, the figure rose by 7,000 among those in their 20s and by 27,000 among those in their 30s.

Total unemployment stood at 855,000, up 11,000 from a year earlier. While a rising college enrollment rate has expanded the pool of degree holders, the unemployment rate among college graduates also climbed from 2.8 percent last year to 3.0 percent this year — a 0.2 percentage point increase — pointing to a genuine deterioration in labor market conditions.

The employment difficulties facing young workers were particularly pronounced. The unemployment rate among college graduates in their 20s rose 0.6 percentage points to 8.3 percent, the highest for the same quarter since 2021. The rate for those in their 30s also climbed 0.6 percentage points to 2.9 percent.

The number of first-time job seekers with no prior work experience also reversed course. There were 56,000 such unemployed individuals in the second quarter, up 7,000 from last year — the first increase in seven years since 2019. Among them, 48,000 were in their 20s, a jump of 11,000, underscoring how much higher the bar has become for young people entering the workforce for the first time.

Experts said shifts in corporate hiring practices are deepening youth unemployment. Companies have continued to scale back open recruitment for new graduates in favor of experienced candidates who can contribute immediately.

The spread of AI is also cited as a factor suppressing entry-level hiring. As AI adoption expands in professional fields such as accounting and law, demand for junior workers with limited experience is declining, analysts said.

Experts said policies to support young people's entry into the labor market — and incentives for companies to expand new-graduate hiring — are needed in the long run, particularly to prepare for the eventual retirement of the existing workforce.