Wages have increased in sectors heavily exposed to artificial intelligence (AI), but new hiring has decreased, reflecting a shift in the employment and wage structure in South Korea. Job opportunities for young people have significantly declined, widening the wage gap associated with AI exposure.
According to data from the National Data Agency and the Ministry of Employment and Labor, the number of employed individuals reached 29.15 million in August, an increase of 184,000 compared to the same period last year. However, employment among those in their 20s fell by 164,000.
In contrast, employment for those in their 30s and 50s rose by 91,000 and 62,000, respectively, indicating a trend of increased experience rather than new hires. The employment rate for young people aged 15 to 29 dropped to 44.1% in August, a decline of 1 percentage point, marking eight consecutive months of year-on-year decreases. The employment rate for those aged 20 to 24 fell by 1.8 percentage points, while the youth unemployment rate rose to 5.4%, an increase of 0.5 percentage points.
A report from the Bank of Korea titled 'Youth Employment Contraction: Is AI to Blame? Changing Career Ladders and Response Challenges' indicates that of the 285,000 youth jobs lost from June 2022 to June 2026, 268,000 (94%) were in sectors with high AI exposure. During the same period, jobs for those in their 50s increased by 230,000.
Despite a shortage of workers in IT development and research roles, hiring has been reduced. In the first quarter of this year, the information and communication research and engineering sector aimed to hire 25,000 workers but ultimately could not fill 4,000 positions (16.2%), the third-highest unfilled rate across all sectors.
The current shortfall in this sector stands at 16,000 positions. Companies have reduced their hiring plans for the second and third quarters by 3,000 compared to last year, and the number of positions they intended to fill in the first quarter was also 2,000 lower than a year ago. The most cited reason for the inability to find suitable candidates was the lack of applicants with the desired experience (25.8%).
Wages have also shown a mixed trend, particularly in AI-exposed sectors. In July, the average wage in the professional, scientific, and technical services sector, which includes research and engineering roles, rose to 5.99 million won, a 5.5% increase, more than double the overall average increase of 2.5%. In contrast, the accommodation and food service sector, which has low AI exposure, reported the lowest average wage at 2.448 million won.
While the average wage for regular workers increased by 3.4% to 4.633 million won, wages for temporary workers decreased by 2.6% to 1.736 million won. Low-wage jobs are also declining. In August, while the number of regular workers increased by 180,000, temporary workers decreased by 50,000, and daily workers fell by 17,000.
Analysis by the Korea Information Society Development Institute (KISDI) of 217 industries from 2013 to 2023 found that industries with a 0.1-point higher AI exposure saw an 8.13 percentage point increase in the wage ratio between the top 10% and bottom 10% of earners.
KISDI explains that as AI replaces certain job functions, relative wages among workers are changing, and companies are responding to employment reductions through reduced new hiring or natural attrition rather than layoffs. Overall employment may remain stable, but youth employment is declining, wages in high-skilled sectors are rising, and low-wage jobs are diminishing.
* This article has been translated by AI.
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