A recent survey reveals that 4.06 million South Korean university graduates are part of the economically inactive population, meaning they are neither employed nor seeking employment. This startling statistic indicates that one in four of the economically inactive holds a university degree. Additionally, data shows that 32% of those aged 20-34 with employment experience—totaling 2.2 million individuals—took over a year to secure a job after beginning their search. Alarmingly, 20% of this group, or 1.33 million people, needed more than two years to find employment.
These figures highlight the urgent need for sweeping labor and education reforms in South Korea. Securing a permanent position at a large company, a common goal among university graduates, has become increasingly elusive. Many graduates find themselves trapped in a vicious cycle of repeated job applications and continuous rejections, leading some to abandon their job search altogether. While a portion of the economically inactive population has stepped back due to physical or mental disabilities, childcare responsibilities, or household duties, there are also 2.37 million individuals who are ‘just resting’ without any specific reason. This situation exposes significant flaws in an education system that produces an excess of university graduates and a labor market that fails to absorb them.
Job opportunities at large companies, highly coveted by young people, are dwindling. As university graduates’ skills lag behind technological advancements, large companies are significantly reducing open recruitment for new graduates, increasingly favoring ad-hoc hiring focused on experienced personnel. The rigid employment system further exacerbates the problem for university graduates. With regular employees being nearly impossible to dismiss and a seniority-based pay system guaranteeing annual salary increases, companies are hesitant to hire new regular employees. To boost youth employment, the pay system needs to transition from a seniority-based to a job-based or performance-based system. However, progress in wage and labor reforms remains stagnant.
The surge in highly educated yet economically inactive individuals results from an oversupply of university students and the low quality of university education, creating a significant mismatch between the supply and demand for skilled labor. Reforming universities and aligning education with industry needs is crucial. However, efforts to restructure universities and adjust enrollment quotas by department are often thwarted by entrenched interests within academic institutions. Although the Yoon Suk-yeol administration identified labor, education, and pension reforms as major national priorities from the outset, none have been effectively implemented. If this situation persists, the number of ‘idle university graduates’ will continue to grow, posing an increasing threat to the nation’s economic and social stability.
