Governments around the world are trying to boost their economically active populations to drive growth in a sustainable way. But they face deepening labor problems, especially regarding rising youth unemployment, as well as more young people who are not in employment, education or training, known as NEET.
South Korea is no exception. The government has taken measures to reduce its NEET ratio and boost overall economic participation. But the latest data shows that the country confronts an increasingly troubling trend in the labor market.
According to Statistics Korea, the average number of college graduates neither employed nor seeking work has expanded to more than 4 million in the first half of this year, suggesting that more people with higher education backgrounds are being excluded from the labor force due to the lack of quality jobs.
An average of 4.06 million individuals with college degrees or higher, including those from technical colleges, were categorized as economic inactive during the January-June period, up 72,000 from a year earlier.
The on-year increase marks the highest six-month figure since 1999 when the government began to compile related data, including those for the economically inactive population, or those aged 15 and above who are neither employed nor actively seeking work.
The number of economically inactive college graduates has risen for the second straight time since the first half of 2022 when it stood at 3.91 million. The figure was 3.99 million in 2023.
The steady growth of the NEET population with college degrees bucks the broader trend in which the economically inactive population has been decreasing since the first half of 2021. Inactive college graduates now make up 25.1 percent of the economically inactive population.
The data suggests that at least 1 in 4 college graduates are not doing anything to get a job. In particular, the monthly average of economically inactive college graduates aged 15-29 reached 591,000 in the first half of this year, up 7,000 from a year earlier.
The deepening difficulty of finding a job among young, educated people seems to reflect the recent trend that companies prefer hiring experienced veterans depending on their needs rather than holding a regular screening for younger job seekers fresh from universities.
In addition, college graduates are forced to spend more time before landing a job. According to Statistics Korea, 6.83 million people aged 20-34, who have found jobs or have work experience, spent an average time of 14 months to secure their first job as of May this year, up 1.7 months from the previous year. Among them, 2.2 million, or 32 percent, took more than a year to find a job and 1.33 million, or 19.6 percent, spent over two years.
What disappoints young job seekers is that the quality of jobs tends to be poor. A significant proportion of those who land a job end up with part-time positions (18.9 percent) -- working less than 36 hours a week -- or temporary jobs with contracts that last less than a year (28.3 percent). The result is that 6 out of 10 young workers earn less than 2 million won ($1,440) a month, resulting in a frustrating cycle of job-hopping and instability.
Experts suggest the problematic trend partly stems from a mismatch between job seekers’ qualifications and available positions amid the shrinking number of quality jobs for educated individuals. Another interpretation is that the overall economic conditions are not improving, forcing companies to hire fewer people to weather the slowdown.
Last year the government implemented a set of job matching and vocational training programs to encourage more young people to seek jobs. More active efforts are needed to help the economically inactive population to find a job and stay in the labor market.
