The number of permanent employees stood at 16.74 million in May, down 7,000 from a year earlier, according to the Ministry of Data and Statistics. It marked the first year-on-year decline since December 1999, when the economy was still reeling from the Asian financial crisis.
Permanent employees are wage workers expected to remain employed for at least one year and are widely regarded as the closest proxy for stable, regular employment.
The decline ended a 316-month expansion streak that had continued uninterrupted since January 2000, surviving even the COVID-19 pandemic.
The deterioration was concentrated among younger age groups. The number of permanent jobs held by people in their 20s fell by 164,000 from a year earlier, while those held by workers in their 30s declined by 34,000. Their combined loss of 197,000 marked the steepest decline since December 2020, when the labor market was under severe pandemic pressure.
Manufacturing remained the biggest drag. Permanent manufacturing jobs held by workers in their 20s and 30s fell by a combined 92,000, while overall manufacturing employment dropped by 140,000 from a year earlier, extending its decline to a 23rd consecutive month.
The latest data also suggested that labor market weakness is no longer confined to traditional factory sectors.
Among workers in their 20s, permanent jobs in the information and communications sector fell by 57,000, a larger decline than in manufacturing.
By contrast, permanent jobs among workers in their 30s in the same sector rose by 26,000, suggesting that hiring in software development, computer programming and other IT-related fields may be shifting away from entry-level positions toward more experienced workers.
The professional, scientific and technical services sector also showed pronounced weakness.
Permanent jobs among workers in their 30s in the sector fell by 76,000, the largest decline among major industries for that age group.
The category includes research and development, engineering, architecture, legal services and accounting, raising concerns that artificial intelligence may already be weighing on hiring in white-collar and professional occupations, particularly for younger job seekers.
The government, however, has stopped short of directly attributing the slowdown to AI.
Officials say employment typically lags broader economic conditions and that earlier shocks this year may now be feeding through to hiring decisions.
The Ministry of Economy and Finance has also pointed to the prolonged Middle East conflict as a growing risk, citing higher raw material costs and elevated uncertainty for businesses.
"We will place the highest policy priority on improving employment conditions for young people and make every possible effort," Deputy Prime Minister and Finance Minister Koo Yun-cheol said during an emergency economic headquarters meeting and a meeting of economy-related ministers last Friday.
Koo said the government would closely analyze employment trends by age group and industry, implement immediate measures where necessary and pursue broader institutional reforms over the medium and long term.
Earlier this year, the government projected that total employment would increase by 160,000 in 2026, expecting job losses in construction and manufacturing to moderate.
The latest figures, however, suggest the recovery is becoming increasingly fragile, with stable jobs for younger Koreans deteriorating across both manufacturing and white-collar industries. Korea's shrinking youth population, rapid automation and accelerating AI adoption are beginning to converge, threatening what had long been considered the safest segment of the labor market: permanent employment.
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