The unemployment rate for young people is spiraling upwards, raising concerns that the country is entering a sustained period of high unemployment, as experienced by Japan over the past few decades.
Economists say that the rate will continue haunting the economy unless the country recovers its growth potential.
According to Statistics Korea, Wednesday, the rate for people aged between 15 and 29 marked 12.5 percent in February, the highest since 1999 when a new standard was adopted to define unemployment.
Before that, those looking for work for one week but failing to get a job were categorized as jobless, but now the search must last for more than four weeks.
The rate has been continuing to rise, from 7.4 percent last October to 9.5 percent in January, surpassing 12 percent for the first time in February.
Youth unemployment tends to increase in February as university students graduate here, but this year is still higher than before. Last year, it was 11.1 percent, up from 10.9 percent in 2014.
Neither employed nor in training
Statistics Korea attributed the rising unemployment rate to increasing applicants for the nationwide civil service exam in mid-February. The number of applicants for 4,120 government jobs totaled 222,650, up 16.6 percent from 190,987 in 2015.
Sim Won-bo, head of the employment statistics division at the statistics office, said that the government exam factor pulled up the unemployment rate by 0.5 percentage points.
Overall job market conditions deteriorated, with the overall unemployment rate recording 4.9 percent, the highest since February 2010. The number of the employed stood at 25.4 million, up 223,000 from the end of 2015.
The "real" unemployment rate, including those looking for other jobs while working part-time or preparing for work, marked 12.3 percent, the highest in 12 months.
Some economists say that the high youth unemployment may continue as it did in Japan's two "lost decades."
"After the collapse of the bubble in the early 1990s, Japan's youth jobless rate rose for more than a decade," said Ryu Sang-yun, an economist at the LG Economic Research Institute. "It fell after 2003 due to the aging of the population, but there was no qualitative improvement."
Japan's youth unemployment was around 2 percent in the late 1960s when the economy was marking double-digit growth, but the rate shot up to 10.1 percent in 2003. Among young employed people, the ratio of part-time workers rose to nearly 40 percent in the 2000s. He added that young people who are neither employed nor in education or training, are likely to remain so after five or ten years, falling into poverty as they age.
"Since Korea is similar to Japan two decades ago in terms of growth patterns and the young population, the difficulty in unemployment is likely to continue unless growth potential is recovered," Ryu said. The economist pointed out that the country's growth potential is expected to fall to 2.5 percent for the next five years and into the 1 percent range in the 2020s.
Ryu suggested that structural reforms and creation of new growth engines will help recover this.
"Efforts should continue to lessen rigidity in the labor market and get rid of any mismatch between jobseekers and employers," he said.
The government is preparing measures to tackle youth unemployment, scheduled to be announced next month.
A notable rebound in the job market, however, isn't likely as businesses may decrease hiring rookies on the sluggish economy as well as the extension of the official retirement age from between 55 and 58 to 60.
Reality is harsher than headline figure
For many young people, efforts to land a job are endlessly frustrating.
Choi, a 28-year-old university graduate, remains unemployed two years after graduation. He has applied to companies — mostly well-known big firms — nearly 50 times over the period, but what he got in return was disappointment at himself and anger at society.
"It's a living hell," he said. "Unemployment feels much more than 12.5 percent. It's especially much harder for students with a liberal arts degree."
Another jobseeker, surnamed Kim, 25, said she decided to prepare for the civil service exam after being rejected by 13 companies. She cited a popular preference for working at big companies as one of the key culprits behind the intensifying competition.
"No one wants a low wage," she said. "Everyone wants to work for a big conglomerate. I think people's strong preference for that kind of work makes the job market extremely tough for young people fresh out of university."
Kim, a university graduate, could not avoid the trend despite having a perfect TOEIC score and impressive extracurricular activities.
"I applied to 13 companies in the latter half of last year, but I failed all," she said. "After failing to get a job, I decided to prepare for the public administration examination, though this is not what I dreamed of. But I think studying for the examination is much better than passing the rigmarole of obtaining a position in a private firm."
She went on, "I was offered a temporary position by a public enterprise where I had interned before. However, I rejected it because I knew how the company treated its contract workers."
Korea Times interns Lee Han-soo and Kim Da-hee contributed to this article.