Korea Faces Aging Workforce
By Yoon Ja-young
Staff Reporter
The country's workforce is getting old. Economists fear that this trend, coupled with the decreasing number of young people with jobs, could eat into the growth potential of the economy.
According to the Bank of Korea, 23.2 million people were employed in the country as of December last year, down 16,000 from a year earlier, a number that could have been worse in light of the global economic crisis. The number of the employed people aged between 25 and 49, meanwhile, dropped by 257,000 to 14.9 million, falling below 15 million for the first time.
It was the biggest drop since 1998, when the country saw 741,000 jobs in the age bracket disappear following the Asian financial crisis.
Now the group represents 64.2 percent of all employed people, the lowest ratio ever.
Economists explain that the aging of the population has cut the number of workers in this age group. Businesses also refrained from hiring new graduates amid the economic downturn.
Economists warn that the falling number of employed from this age group negatively affects productivity and consumption, as they are both the workers with highest productivity and the biggest consumer group. With their falling income, however, they may refrain from spending.
Lee Seo-won, a senior researcher at LG Economic Research Institute, warned that the job market for young people could deteriorate rapidly. He pointed out that the unemployment rate for people aged between 15 and 29 here stood at 8.5 percent, which is the lowest among Organization for Economic Cooperation and Development (OECD) member countries.
He noted that many such young people stay without a job for years, not engaged in education, employment or training activities.
"The ratio of such youths here is the highest among developed countries. This means that youth unemployment could be a long term problem," Lee said.
Economists advise that the government should devise a new growth engine, especially by developing the services sector.
Lee suggested that the government should encourage small- and medium-sized firms to hire youths under a long term vision, instead of to one time, short-term job training programs.