SEOUL, June 14 (AJP) -South Korea's worsening employment data is exposing a growing K-shaped divide in the labor market, where a historic semiconductor boom continues to create high-paying jobs while much of the broader manufacturing sector sheds workers.
The country's employment rate posted its steepest decline in more than five years in May as weakness in manufacturing and youth hiring highlighted the limited spillover from a recovery increasingly driven by memory chip exports.
According to data released by the Ministry of Data and Statistics, the employment rate for people aged 15 and older fell 0.5 percentage point from a year earlier to 63.3 percent, the sharpest decline since February 2021.
The number of employed people aged 15 and older stood at 29.12 million, down 40,000 from a year earlier and marking the first annual decline since December 2024.
The downturn stood in stark contrast to the hiring momentum at South Korea's semiconductor champions.
SK hynix increased its workforce by 2,159 employees to 34,549 at the end of 2025, while Samsung Electronics' Device Solutions division, which oversees its semiconductor business, maintained a workforce of more than 78,000 despite a slight decline from the previous year.
Combined semiconductor employment at the two firms rose by 1,554 workers over the year. Power-chip maker DB HiTek also expanded its workforce by 170 employees.
Industry officials expect hiring to continue this year as surging global demand for artificial intelligence infrastructure fuels what many describe as a once-in-a-generation memory supercycle.
SK hynix recently broadened its rolling recruitment system to include both office and technical positions, while Samsung Group has pledged to hire 60,000 workers over five years, focusing on semiconductors, AI-related industries and biotechnology.
The industry's strong profitability and generous bonus packages have also intensified competition for semiconductor-linked university programs. Recent admissions forecasts suggest contract-based semiconductor departments could soon require entrance scores comparable to traditional medical schools and higher than many pharmacy programs.
Outside the chip sector, however, the picture remains dim.
Manufacturing employment fell by 140,000 from a year earlier to 4.295 million in May, extending a decline that has lasted 23 consecutive months. The decrease more than doubled from April and marked the largest contraction since February 2019.
Agriculture, forestry and fisheries lost 121,000 jobs, while professional, scientific and technical services shed 89,000 positions.
Health and social welfare services added 212,000 jobs, but the gains were concentrated in sectors heavily dependent on senior and temporary workers and were insufficient to offset losses elsewhere.
Young workers were among the hardest hit. Employment among people aged 15 to 29 dropped by 255,000 from a year earlier to 3.427 million, while the youth employment rate fell 2.4 percentage points to 43.8 percent. The youth unemployment rate rose 0.6 percentage point to 7.2 percent.
According to the Bank of Korea's Economic Statistics System (ECOS), the semiconductor industry creates about 2.0 jobs for every 1 billion won ($656,000) of output, less than half the 4.3 jobs generated by the automobile industry.
Analysts say stronger export growth in automobiles and machinery, along with greater labor-market flexibility, will be needed if the benefits of Korea's industrial recovery are to spread beyond the semiconductor sector.
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