AI reshapes labor markets in U.S., Korea

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Artificial intelligence (AI) is redrawing the labor markets in South Korea and the United States, with AI adoption leading to layoffs among white-collar workers in the U.S. while long-term reductions in new hiring in Korea.

According to Bloomberg and U.S. Bureau of Labor Statistics on Sunday, the share of unemployed Americans with a four-year college degree reached 25 percent As of September, the highest on record since data collection began in 1992.

Layoff announcements from large corporations, such as Amazon, Target, and Starbucks, citing AI adoption have been clearly reflected in these numbers.

The U.S. unemployment rate for young adults aged 20-24 climbed to 9.2 percent in September, up 2.2 percentage points from a year earlier.

Korea is also experiencing AI-driven labor market shocks.

According to the Ministry of Data and Statistics, the share of unemployed people with a college degree or higher rose from 37.7 percent in 2010 to 47.8 percent in 2024. It reached 49.6 percent during the first three quarters of this year.

Although the total number of unemployed is declining due to a shrinking population, the proportion of college-educated unemployed continues to rise steadily.

Young people, in particular, are bearing the brunt of the impact. As strict labor laws make mass layoffs difficult in Korea, companies are cutting back on new hires for young workers instead of firing existing staff as U.S. companies do.

(Yonhap)

A recent Bank of Korea report found that of the 211,000 youth jobs lost over the past three years, 98 percent were concentrated in sectors with high AI exposure.

In contrast, employment among workers in their 50s rose by 209,000 during the same period, with nearly 70 percent of those gains also in AI-exposed industries.

Economists describe the trend as “seniority-biased technological change,” where AI displaces junior, routine-focused roles while increasing demand for experienced workers with domain expertise.

The shift comes as the government and ruling party push to raise the statutory retirement age.

In its latest report on Korea, the International Monetary Fund (IMF), recommended that any extension — such as raising the retirement age from 60 to 65 — be paired with pension reform and changes to seniority-based wage systems to mitigate labor-market distortions.

Authorities have also flagged growing concern over youth employment. The jobless rate among those aged 15 to 29 has been trending downward only slowly, while more than 400,000 young Koreans remain classified as “idle” — neither employed, in training, nor seeking work.