Lee Hyung-il, first vice minister of the Ministry of Economy and Finance, chairs the August 2026 jobs task force meeting at Government Complex Seoul on Wednesday. [Ministry of Economy and Finance]
Lee Hyung-il, first vice minister of the Ministry of Economy and Finance, chairs the August 2026 jobs task force meeting at Government Complex Seoul on Wednesday. [Ministry of Economy and Finance]

Total employment rose, but the number of employed young people fell by more than 190,000 over the past year — a decline that has now stretched for 45 consecutive months. Youth unemployment also climbed at its steepest pace in five and a half years. With the youth employment freeze showing no sign of thawing, the government has decided to revise a youth job recovery plan it had been on the verge of releasing and announce it in the near future.

Lee Hyung-il, first vice minister of the Ministry of Economy and Finance, chaired a joint inter-agency jobs task force meeting Wednesday morning at Government Complex Seoul to review July employment trends and discuss the youth job recovery plan.

The government said it would finalize the youth job recovery plan through consultations with related ministries and announce it as soon as possible. Preparatory steps for implementing the measures and providing young people with policy information will also move forward in parallel.

The government had originally planned to brief President Lee Jae Myung on the youth job recovery plan at Tuesday's Cabinet meeting before releasing it publicly. The Ministry of Economy and Finance, the Ministry of Employment and Labor and other related ministries had even scheduled advance briefings, but abruptly postponed the report, citing the need to adjust the agenda. The plan, months in the making and with a release date already set, was shelved at the last moment.

Sources inside and outside the government say there were calls to further flesh out the plan's content, in addition to resolving budget issues and completing additional inter-agency consultations.

President Lee's recent direct intervention on youth employment is also seen as a factor behind the revision. At a ministry briefing on Aug. 4, Lee ordered officials to draw up innovative measures to expand quality jobs that young people actually want. He particularly stressed the need to promote youth entrepreneurship — not just corporate hiring — in response to structural shifts in industry driven by the spread of AI and other technological changes.

The government had already signaled the broad direction of its youth employment policy at a ministerial meeting on economic and structural reform chaired by Deputy Prime Minister and Finance Minister Koo Yun-cheol on Thursday. The plan envisions training more than 200,000 specialists in advanced and high-demand fields such as AI by 2030, and creating a combined 300,000 job and startup opportunities through private-sector and public employment as well as youth entrepreneurship support.

The decision to revise a plan that had in effect entered its announcement phase — with even its headline targets already made public — also reflects the stubbornly persistent youth employment crisis.

According to the Ministry of Statistics' July employment survey, the number of employed people aged 15 to 29 stood at 3.441 million last month, down 191,000 from a year earlier. Even accounting for a 144,000 decline in the youth population over the same period, the drop in employment was steeper.

The youth employment rate fell 1.6 percentage points year-on-year to 44.2 percent. The number of unemployed young people rose by 41,000 to 251,000, pushing the youth unemployment rate up 1.3 percentage points from 5.5 percent to 6.8 percent.

Particularly striking was the employment slump among people in their early 20s, who are just entering the workforce. The number of employed 20-to-24-year-olds fell from 1.065 million in July last year to 941,000 in July this year, a drop of 124,000. The employment rate for that age group tumbled 3.2 percentage points, from 45.8 percent to 42.6 percent. Employment among 25-to-29-year-olds also fell by 80,000, with the employment rate slipping 0.6 percentage points to 71.4 percent.

The youth figures look even starker against the broader employment picture. Total employed workers in July rose 108,000 from a year earlier, with the gain widening from 63,000 in June to return to the 100,000-plus range for the first time in four months. Even as overall employment grew, youth employment fell by more than 190,000.

If all the youth employment measures currently under review are reflected in next year's budget, the total could reach 7 trillion to 8 trillion won ($5.65 billion) — a record high, according to some projections. However, there are also concerns that simply expanding fiscal spending may not be enough to resolve the youth employment crisis.

"Expanded support is necessary given how difficult the youth employment situation is, but we need to carefully examine whether the additional hiring effect is commensurate with the fiscal outlay," said Yoon Dong-yeol, a professor of business administration at Konkuk University. "If 'deadweight loss' — subsidies paid for young workers who would have been hired anyway — grows larger, the budget increases but the net employment effect may be limited."

Meanwhile, the government sees heightened tensions in the Middle East and worsening weather conditions such as extreme heat as potential downside risks to the employment market going forward. In response, it plans to develop countermeasures for sectors with weak employment — including manufacturing, construction, and agriculture and forestry — separately from the youth measures. The government intends to identify additional tasks centered on boosting industrial vitality, developing the workforce, expanding jobs and entrepreneurship opportunities, improving working conditions, and strengthening the employment base, before discussing them at the jobs task force and announcing them through ministerial meetings on economic affairs.


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