South Korea faces slow job growth amid economic challenges
- Josephine Tan
- Topics: Home Page - News, Mobility, News, South Korea
South Korea’s employment growth decelerated sharply in 2024, with significant job losses in key sectors such as construction, manufacturing, and retail, compounded by declining opportunities for younger employees. Statistics Korea reported that the number of employed people rose by only 159,000, or 0.6%, to 28.58 million, falling short of the government’s projection of 170,000 new jobs.
This marks a steep decline from previous years, with job additions shrinking from 816,000 in 2022 to 327,000 in 2023. The slowdown was starkly evident in December 2024, when the country posted a net loss of 52,000 jobs—the first year-on-year decline in nearly four years—following an addition of 120,000 jobs in November.
The construction sector saw the steepest drop, losing 49,000 jobs, the largest since records began in 2013. Retail and wholesale employment continued its seven-year decline, shedding 61,000 jobs, while business facilities management and rental services contracted by 52,000.
Younger employees were hit hardest, with employment among those aged 15-29 dropping by 124,000, driven in part by a shrinking population in this demographic. In contrast, jobs for individuals aged 60 and older increased by 266,000, the largest gain among all age groups.
READ MORE: South Korea’s female employment and labour participation rates lag among OECD nations
A combination of high living costs, elevated interest rates, and subdued domestic demand contributed to the labour market’s struggles. Retail sales fell 2.1% in the first 11 months of 2024, the steepest decline in 24 years, while economically inactive individuals aged 15-64 rose by 117,000.
Finance Minister and Acting President Choi Sang-mok attributed the downturn to temporary factors such as the end of year-end job programmes and negative economic sentiment. Looking ahead, he warned of continued challenges, including delayed recovery in key industries and a shrinking working-age population.
To address these issues, the government plans to fast-track spending of 431.1 trillion won (US$300.2 billion) in early 2025 to stimulate domestic demand and support job creation. However, Choi cautioned that the outlook for the labour market remains uncertain, reported The Korea Times.
