Youth Unemployment Mimics Japan's Lost Decades

Jobseekers crowd booths at a job fair in Seoul (file photo).

Unemployment among young Koreans between 15 and 29 reached a record 12.5 percent last month, Statistics Korea said Wednesday.

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The previous record was 14.5 percent in 1999, just after the onset of the Asian financial crisis.

The overall jobless rate for February rose to 4.9 percent, which was the highest seen since January 2010. The number of newly hired workers totaled 223,000 last month, down 116,000 compared to January.

Youth unemployment tends to rise in February because massive numbers of students graduate from universities and high schools and start looking for jobs. But unemployment among young people has been increasing steadily since reaching a record 9.2 percent last year.

This has led to mounting concerns that Korea is following in the footsteps of Japan during its 20-year recession.

Japan managed to keep youth unemployment in the four-percent range until the 1980s, when the economy grew at a breakneck speed. But after the bubble burst in the 1990s, the country entered a drawn-out recession with youth unemployment surging to the nine-percent level.

Korea's youth unemployment last month was even higher than in Japan during its peak of 10.1 percent in 2003.

"Japan's youth unemployment surged after its economic growth fell to the one-percent level in 1993, and the trend continued until the late 2000s when the population in their 20s started to shrink", said Ryu Sang-yoon at LG Economic Research Institute.

"Korea's growth trend and youth population is similar to Japan's 20 years ago, so we will probably see a continuation of high youth unemployment unless the potential economic growth rate recovers".