[Initial Report] Companies Struggling with Labor Shortage... 500,000 Youths Simply Taking Time Off

Companies are struggling with labor shortages. Who is to blame for the repeated complaints that have sounded like a broken record for years? Despite the government and local authorities offering support funds worth tens of millions of won, it is rare to find people willing to work.

On the other hand, nearly 500,000 young people are neither job hunting nor preparing for employment; they are simply resting. The number of young people who have succeeded in finding jobs and are working at companies is also declining. This mismatch between jobs and people is an uncomfortable reality for the Korean economy.

The situation in the shipbuilding industry, which has secured work until 2027, is not just serious but desperate. In the past, there was a saying that working at a shipyard might not make you rich, but you could work there for a long time. Although the work was tough and demanding, some settled in shipyards. However, after several recessions, that saying has become a thing of the past. As the subcontracting structure solidified and most partner companies began reducing their workforce, it is estimated that over 80,000 production workers have left shipyards in the past eight years.

Shipbuilders are finding it difficult to retain departing workers and are requesting support. Since 2021, domestic shipbuilders have seen a surge in orders, especially for eco-friendly vessels. Last month, they surpassed China to become the world leader in order volume. However, they are complaining that there are no workers to build the ships and are asking for an increase in foreign hires.

The government and local authorities are also operating various employment support programs to sustain the shipbuilding industry, a key export sector, and to revitalize regional economies. For example, Geoje City in Gyeongnam Province plans to provide up to 13.6 million won annually to production workers with over ten years of experience from other cities or provinces who relocate their residence to Geoje and find employment in shipbuilding. Nevertheless, despite these benefits, the industry estimates a shortage of up to 14,000 skilled workers in shipbuilding by the end of the year.

Now, the labor shortage is not limited to specific industries. The semiconductor sector, considered a national core industry, is also concerned about workforce shortages. The Korea Semiconductor Industry Association expects a shortage of about 54,000 domestic semiconductor bachelor's, master's, and doctoral degree holders by 2031. Companies like Samsung Electronics and SK Hynix have established semiconductor contract departments to nurture talent, but most of these departments are recruiting additional candidates because admitted students are not enrolling.

The labor shortage in the industrial sector is clearly reflected in statistics. Last month, employment increased by 413,000 among those aged 60 and over, but decreased by 101,000 in all other age groups combined. Employment among young people aged 20 and under dropped by 125,000, marking the largest decline in two years since February 2021.

The youth unemployment rate rose by 0.1 percentage points year-on-year to 7.0%. The rate for those in their 30s also increased by 0.1 percentage points to 2.7%. In particular, manufacturing employment sharply declined due to economic downturn. While manufacturing jobs remain available, nearly 500,000 young people are not working. Among the economically inactive population, 497,000 young people reported their activity status as "resting" as of February. This is the largest number since statistics began being compiled in January 2003.

Not all young people who are resting are necessarily wasting their time. Each person who has not found a job or employment likely has their own reasons. However, these figures clearly show that work is no longer directly linked to survival. For young people, manufacturing jobs may simply be "unattractive." Is our society ready to accept the reality that the labor-intensive growth model, which has continued since the past, has reached its limits? This is a question that is not easy to answer.