South Korean graduate unemployment hits 5-year high amid AI shift

South Korea is grappling with a significant increase in unemployment among college graduates, reaching its highest level in five years with 481,000 individuals jobless in the second quarter. This surge is attributed to companies favoring experienced professionals over new graduates, a shift amplified by the growing use of generative artificial intelligence (AI) in the workplace. AI's ability to handle routine tasks has led to a sharp decline in entry-level job postings, leaving many young job seekers struggling to find employment.

Lee Sang-gyu, a 31-year-old IT development hopeful, exemplifies this challenge. Despite graduating with a degree in information and communication engineering, he has been unemployed for a year, having applied to dozens of companies without success. His situation reflects a broader concern that AI is encroaching on job opportunities, particularly for those entering the workforce.

The trend is expected to intensify as South Korea is projected to lead major economies in AI adoption within a decade, with its adoption rate potentially reaching 50%. While AI is expected to boost productivity, its rapid integration poses a significant challenge to the labor market, especially for young workers. The National Assembly Budget Office suggests increased investment in AI tailored to specific industries is crucial for long-term growth, given the limitations of labor and capital in an aging society.

Compounding the issue, employment in professional, scientific, and technical services saw its largest drop since 2013, with 88,000 fewer jobs. Manufacturing also continued its decline. This dual pressure of reduced hiring and AI adoption could further shrink new graduate opportunities in both office and professional roles, while manufacturing employment remains sluggish. The government has acknowledged this by lowering its employment growth forecast despite raising its economic growth projections, highlighting a disconnect between economic expansion and job creation.

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I have applied to dozens of companies but haven't found a job, and I've been looking for a year.