Employment in South Korea fell by more than 50,000 last month compared to a year earlier, marking the first year-on-year decline in 46 months since Feb. 2021, when the labor market was hit hard by the COVID-19 pandemic.
The prolonged slump in domestic demand, particularly in the construction and retail sectors, was a key factor behind the drop. Political turmoil, including the imposition of martial law and the impeachment of President Yoon Suk-yeol, also dampened consumer sentiment, contributing to an unusual employment freeze. Last year, the total number of employed people increased by only 150,000, less than half the growth recorded the previous year.
According to Statistics Korea’s report released on Jan. 15, the number of employed people last month stood at 28,041,000, down by 52,000 from a year earlier. The agency said that the sharp decrease was concentrated in domestic sectors such as construction and retail.
Employment in the construction industry dropped by 157,000 due to weak construction activity, while the manufacturing and retail sectors each saw a decline of nearly 100,000 jobs. Song Jun-haeng, a Statistics Korea official, noted that within manufacturing, sectors like clothing and electronic components experienced particularly significant job losses. Yang Jun-mo, a professor at Yonsei University, pointed to downturns in key industries such as petrochemicals and steel as major factors curbing employment in manufacturing.
The government attributed part of the year-end employment slump to political instability. Statistics Korea conducts its monthly employment survey during the week containing the 15th, classifying anyone who worked at least one hour during that period as employed.
In December, the survey was conducted during the week of Dec. 15–21, starting the day after the National Assembly passed an impeachment motion against President Yoon on Dec. 14. The political unrest, which sparked protests both for and against the impeachment, appeared to weigh on public activity. Many people avoided dining out and going on outings, exacerbating job losses in the retail sector. Growth in transportation, warehousing, lodging, and food service jobs also slowed during this period.
The Ministry of Economy and Finance noted that the government’s direct job creation programs, which operate on annual cycles, also affected employment figures. These programs, which typically wind down in early December, had fewer participants during the survey week compared to the corresponding period in 2023, leading to a lower tally of government-supported jobs.
The construction sector and elderly employment programs were hit hardest, with the number of day laborers (those employed for less than one month) and temporary workers (employed for one month to less than one year) falling by 147,000 and 19,000, respectively. In contrast, the number of regular employees (employed for one year or longer) increased by 12,000.
While the construction sector and elderly employment programs were the hardest-hit industries, young people suffered the most significant impact among age groups. The employment rate, which measures the proportion of people aged 15 and older who are employed, dropped to 61.4% in December, down 0.3 percentage points from a year earlier and the lowest since Jan. 2024.
Among those aged 15–29, the employment rate fell to 44.5%, the lowest since May 2021. The overall unemployment rate rose to 3.8%, the highest since Jan. 2022, while youth unemployment reached 5.9%, close to the 6% threshold. Ha Jun-kyung, a professor at Hanyang University, said the decline in youth employment was particularly acute in sectors such as retail and food service, where young workers are traditionally concentrated.
On average, S. Korea had 28,576,000 employed people per month in 2024, an increase of 159,000 from the previous year. However, the growth rate was less than half of the 327,000 jobs added in 2023, marking the weakest employment performance since 2020, when job numbers fell by nearly 220,000 due to COVID-19 restrictions.
