SEOUL, September 09 (AJP) - Gen Z may be an unlucky lot. The pandemic stole much of their college life, and the shift to artificial intelligence is now stripping away some of their first chances to gain real work experience.
Lee Jae-hong, 27-year-old living in Seoul with his parents, has been applying jobs for two years, and this year, he finds fewer places to apply.
"I feel like standing nowhere. I've started hard all my life and graduated from a decent school. But I cannot even pass the paper work," he said, adding out of his class 2024 just one landed a job.
South Korea's youth employment fell by 143,000 from a year earlier in August, extending its decline to a 46th consecutive month. The employment rate for people aged 15 to 29 dropped 1.0 percentage point to 44.1 percent.
The frustration is also showing up politically. President Lee Jae Myung's approval rating fell to 40 percent in the latest Gallup Korea poll, with support weakest among people in their 20s, where just 25 percent rated his performance positively against 51 percent negatively.
Banks and asset managers — traditionally popular destinations for young humanities graduates — have joined the pullback.
They are narrowing traditional entry-level pathways as artificial intelligence takes over routine junior work and employers increasingly favor recruits who arrive with technology skills and experience.
The youth population itself has been shrinking, but demographics do not fully explain the weakness. The employment rate also declined, indicating that employment fell faster than population alone would imply.
Inside financial companies, employees say the profile firms want has changed.
“We increasingly prefer experienced hires with knowledge of data-analysis tools or development,” a junior-level employee at an asset management firm said. “Even writing prompts well has become a skill.”
The employee spoke on condition of anonymity because he was discussing internal hiring and personnel practices.
Asset managers still recruit junior and associate-level workers, he said, but candidates trained only in conventional financial analysis increasingly compete with workers who combine finance with data, development or AI skills.
Firms also value client-facing and business-development abilities that usually take years to build, giving experienced hires another advantage.
“For a company, it can simply be more efficient to put an experienced person on the job who can win the contract,” the employee said.
Here comes the paradox. Employers want experience, but the jobs that once allowed workers to acquire it are becoming scarcer.
“The traditional route of training juniors has almost disappeared,” the official said.
New bank employees once screened loan-review documents, compiled basic data and drafted preliminary risk reports, the official said. AI models and robotic process automation (RPA) can now perform much of that work within seconds.
“If AI produces the draft, what you need is someone who can judge whether it is right or wrong,” he said. “From the organization's perspective, there is less reason to spend time and money teaching someone everything from the beginning.”
The official asked not to be named, citing the sensitivity of internal personnel matters.
Banks have not stopped hiring graduates, but recruitment has shifted away from large pools of generalist employees toward workers with specialized skills.
South Korea's four largest commercial banks — KB Kookmin Bank, Shinhan Bank, Hana Bank and Woori Bank — hired 485 entry-level employees in the first half of 2026, down 18.5 percent from 595 a year earlier.
Banks have expanded hiring in AI, IT, data analysis and platform development. Mobile banking and branch reductions have weakened demand for traditional generalist staff.
The bank official said firms also increasingly recruit experienced fintech workers who understand both technology and financial services. Those candidates have typically already moved beyond the entry level.
The pattern resembles a broader shift identified by the Bank of Korea.
Youth employment fell by 285,000 between June 2022 and June 2026, according to a BOK study. Industries highly exposed to AI accounted for 268,000, or 94 percent, of the decline.
Youth employment fell particularly sharply in information services, publishing, computer programming and professional services, while employment among workers in their 50s continued to increase in the same highly exposed industries.
The BOK described the pattern as consistent with “seniority-biased technological change,” in which technology can reduce demand for tasks traditionally assigned to less-experienced workers while increasing the value of experienced employees who can supervise, verify or complement AI.
The central bank cautioned, however, that the concentration of job losses in AI-exposed industries does not establish that AI caused the decline.
South Korea's broad labor-underutilization rate fell to 7.6 percent in August from 8.2 percent a year earlier. The rate for people aged 15 to 29 edged up to 15.4 percent from 15.3 percent.
At the same time, the number of young people classified as “resting” fell by 51,000 to 395,000. Among people in their 20s, the number fell by 58,000, and the data indicate that youth employment weakness cannot be reduced solely to withdrawal from the labor market.
Across all age groups, the number of unemployed people who had never previously held a job rose by 9,000, or 28.7 percent, to 39,000 in August. The figure is not limited to young people, but it provides another measure of difficulty at the entry point of the labor market.
Young Koreans are also taking nearly a year on average to secure their first paid job after leaving school.
Among young people whose first job after graduation or leaving school was paid employment, the average wait was 11.2 months in May, according to the Ministry of Data and Statistics.
Overall manufacturing enrollment returned to growth in August for the first time in 15 months. The number of insured workers aged 29 or younger fell by 55,700 across industries and by about 23,000 in manufacturing.
AI alone does not explain South Korea's youth-employment weakness. Demographics, industry conditions and broader changes in corporate hiring all play a role.
The interviews, however, point to a specific pressure on the first rung of the career ladder. Routine work once assigned to inexperienced employees is increasingly automated. Employers place a higher premium on workers who already understand the business and can verify AI output.
For young job seekers, the challenge is increasingly how to gain the experience companies demand when fewer companies are willing to provide the first opportunity.
AJP Takeaways
- South Korea's youth employment fell for a 46th consecutive month in August, while the youth labor-underutilization rate rose to 15.4 percent.
- South Korea's finance firms are increasingly favoring employees with AI, data and industry experience, according to interviews with workers at an asset manager and a commercial bank.
- South Korea's four largest commercial banks hired 485 entry-level employees in the first half of 2026, down 18.5 percent from a year earlier.
- The Bank of Korea found that AI-high-exposure industries accounted for 268,000 of the 285,000 decline in youth employment over four years, while cautioning that the relationship does not prove causation.
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