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Korea's Young Find It Hard to Get a Job
By KIM JUNG MIN Staff Reporter of THE WALL STREET JOURNAL
SEOUL, South Korea -- Lee In Seok has been trying to find work since graduating almost a year ago. The 26-year-old has applied for more than 100 jobs -- all to no avail.
South Korea is home to a growing number of out-of-work 20-somethings. A weak economy, the allure of cheap outsourcing offshore, and the embrace of technology are all contributing to high unemployment among young Koreans. The rate for those aged 15-29 reached 8.6% in December, more than twice the overall jobless rate of 3.6%. Their ranks are so large that they have been dubbed the Kangaroo Tribe because they lack the economic independence to leave the protective pouch of their families.
Graduates have fared the worst. Last year, six out of 10 higher-education graduates failed to land jobs. Even law graduates, traditionally the most sought-after by Korean companies, are having trouble: Nearly two-thirds have been unable to find work.
The surge in youth unemployment is the result of two trends. The first is demographic: Children of Korea's "second baby boom," the progeny of the first baby boomers born after the 1950-53 Korean War, are reaching adulthood and pouring into the job market. The second is economic: Since the Asian financial crisis of the late 1990s, Korean companies have become more focused on profits, paring back work forces, relying increasingly on temporary employees and people with more experience and skills.
They have also turned to technology for labor-intensive tasks and begun outsourcing services and production to cheap locations in Southeast Asia and China.
Add to that a cyclical downturn in the Korean economy -- which resulted in a six-month recession last year -- and the job outlook for young people is dire. When Mr. Lee applied for one of 50 vacancies at a small local food company in December, he was up against 4,500 other applicants. "I didn't even get an interview," he said.
Like Mr. Lee, Song Kyoung Min has also struggled to find work since leaving a university two years ago.
The 26-year-old computer-engineering graduate, who lives with his parents, has been hopping from one part-time job to another and surviving with the help of a small allowance from his parents. "The government isn't doing enough. It doesn't seem to realize the extent of this problem," he said.
The government recently pledged to increase spending on plans aimed at helping to get young people into the work force. But Mr. Song isn't waiting. He has created an online support group for other unemployed 20-somethings. Visitors to his Web site (www.baegsoo.com1) trade tips about job-hunting and how to prevent depression. Since June 2002, more than 4,000 have signed up as members. Once a month, they get together to share a meal and discuss their experiences.
Labor experts say that while the overall jobless rate is likely to fall when the economy improves and companies start replenishing their staffs, it won't necessarily translate into more jobs for younger workers. Korea's growth rate is expected to be slower, on average, in the future as the economy matures, the central bank says. And rising wages have encouraged more Korean companies to move production lines and research-and-development facilities offshore.
Then there is the country's love affair with technology. In the retail industry alone, technology is taking the place of tens of thousands of young job-seekers. Take Lotte Department Store, for example,
which has just built a counter system that replaces sales staff with personal digital assistants. It is planning to introduce the automated system in its 20 stores nationwide. The company expects the system to reduce the number of salespeople, mostly in their 20s, by 70%.
Shifts in the labor market have also been to the disadvantage of the young. Lee Sang Woo, a research fellow at Samsung Economic Research Institute, recalls the go-go years of the early 1990s, when Korean conglomerates ran yearly mass-recruitment drives, hiring thousands of new university graduates and training them. That worked well when the economy was enjoying seemingly boundless growth. Now, companies are paying more attention to profits, creating demand for temporary workers and those with work experience and job skills.
A recent survey by the Ministry of Labor found fresh college graduates accounted for only 18.2% of all recruits in 2002, compared with 59.3% in 1997.
The government has drawn up plans in an effort to provide more opportunities for young job seekers.
This year, it will spend 517 billion won ($434 million) -- up from 362 billion won last year -- on subsidies to companies that hire jobless youngsters, vocational programs and public-sector job-creation efforts.
The job-creation programs last between six months and a year. They are designed to give young people a chance to improve their job skills and gain experience in the private and public sectors. This year, government ministries will offer 142,000 places in their own job-creation programs.
Business leaders complain that universities have failed to foster the kind of competitive manpower they need. "Despite the high unemployment rate, we have a hard time recruiting qualified employees," said Oh Sang Soo, president of Mando Corp., a Korean car-parts maker. A survey of engineering graduates who joined Mando between 2001 and 2003 found that 90% felt they needed more training before starting their jobs.
Industry groups like the Korea Chamber of Commerce and Industry are calling for changes to the country's rigid higher-education system, saying it should include more practical training.