▲AI PRISM* Customized Economic Briefing
*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "AI-based customized news recommendation and summary service" developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.
[Key Issue Briefing]
■ AI Spread and Youth Job Polarization: Over the three years since the spread of ChatGPT, youth jobs have decreased by 210,000, while jobs for those in their 50s have increased by 200,000. A study by the U.S. Census Bureau also found that employment of early-career workers (ages 22-24) in industries with high AI exposure fell 12% over 10 quarters.
■ Youth First-Career State Responsibility System to Be Announced: Kim Young-hoon, Minister of Employment and Labor, said he will announce next week a "Youth First-Career State Responsibility System" under which the state takes responsibility for the formation of young people's first careers. Under the judgment that youth employment problems stem from a structural mismatch between work experience and work careers, the government intends to organize the market so that young people can access new means of production such as AI.
■ Discussion on Flexible R&D Working Hours in Advanced Industries Accelerates: Around the Mega Special Zone Special Act, flexibility in working hours for R&D personnel and the extension of the fixed-term employment period have emerged as key points of contention. The chairman of the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee stated that the scope of flexibilization should be expanded from semiconductors to R&D across advanced industries such as AI and autonomous driving.
[News of Interest to New Employees]
1. "AI Is Taking Jobs?"…High-Level Interpretation Rises While Low-Cost Translation Halves
Key Summary: Over the three years since the spread of ChatGPT, youth jobs decreased by 210,000, while jobs for those in their 50s increased by 200,000. In the second quarter of this year, the number of unemployed people with college degrees or higher reached 481,000, up 39,000 from a year earlier, marking the highest level in five years since 2021, the early stage of the COVID-19 outbreak. In industries with high AI exposure, employment of early-career workers (ages 22-24) fell 12% over 10 quarters, and this was analyzed to have been driven mainly by a decline in new hiring rather than cuts in existing personnel. Experts predicted that rather than replacing entire jobs, AI will erode standardized, entry-level tasks first.
Key Summary: The Minister of Employment and Labor announced that he will unveil next week a "Youth First-Career State Responsibility System" under which the state supports the formation of young people's first careers. The core is a direction in which the state organizes the market so that young people can access new means of production such as AI, under the diagnosis that youth employment problems stem from a structural mismatch between work experience and work careers. He said that easing labor regulations related to the Mega Special Zone Special Act is not yet a finalized government plan, and that a reasonable alternative will be prepared through social dialogue with the two umbrella labor unions. Guidelines on performance-based pay are expected to be detailed within this month.
Key Summary: The chairman of the National Assembly's Trade, Industry and Energy Committee argued that the application of flexible working hours under the Mega Special Zone Act should be expanded from semiconductors to R&D across advanced industries such as AI and autonomous driving. Concerns were also raised that the current draft of the Mega Special Zone Act could become "redundant legislation," merely putting a signboard on top of the existing Semiconductor Special Act and the National Advanced Strategic Industries Act. Under the intent of opening up an environment for intensive work by R&D personnel, he also stated that he cannot agree to a method of passing the ball to the National Assembly without persuading the labor community. The exception to the 52-hour workweek for R&D personnel is an issue that was passed to the current National Assembly without being resolved during the processing of the Semiconductor Special Act last year.
[Reference News for New Employees]
4. Pension Savings Accounts: Fund Share Tops 40% for First Time
Key Summary: As of the end of the second quarter this year, the share of pension savings funds within pension savings accounts (PSA) reached 42.4%, up 10 percentage points from the end of last year (32.4%), surpassing the 40% line for the first time. Total PSA accumulated funds stood at 212.2412 trillion won, up 14.6% from the end of last year, while pension savings fund accumulations in the first half reached 90.0242 trillion won, up 26.9% from the first quarter. In contrast, while pension savings insurance products recorded a one-year return of -4.75% over the past year, the 'TIGER US S&P500' ETF posted a one-year return of 39.48%, showing a clear return gap depending on the management method. It was reconfirmed that when investing pension assets in stocks, a strategy of long-term purchases of index-tracking ETFs is more advantageous than thematic ETFs.
5. Retail Government Bonds Enter Retirement Pensions…Will Demand for Long-Term Bonds Revive?
Key Summary: Starting in September, defined-contribution (DC) retirement pension and individual retirement pension (IRP) accounts will be permitted to purchase 10-year and 20-year retail investment government bonds, broadening the options for principal-guaranteed safe assets. Purchasing government bonds through a retirement pension account allows a tax deduction (13.2-16.5%) up to an annual limit of 9 million won, and if held to maturity and received as a pension after age 55, a low-rate separate taxation (3.3-5.5%) is applied. The 10-year and 20-year bonds, which had suffered continued subscription shortfalls, saw competition ratios of just 0.53 to 1 and 0.67 to 1 last month, respectively, but analysts say demand for long-term bonds will revive with the allowance for inclusion in retirement pensions. Nine companies, including Mirae Asset Securities, are set to serve as sales agents.
6. Elderly Workers Top 10 Million for First Time…Want to Work Until 73, but Retire at 53
Key Summary: The number of employed people aged 55-79 reached 10.125 million, surpassing 10 million for the first time since the related statistics began. While 69.2% of the elderly wanted to work until an average age of 73.6, the average age at which they actually stepped down from their main jobs was 53.0, a gap of more than 20 years from the desired working age. The average monthly pension received was 880,000 won, only 57% of the minimum cost of living for a single-person household (about 1.54 million won), and 74.6% of recipients received less than 1 million won per month. Of those wishing to work, 53.4% cited supplementing living expenses as the reason, meaning livelihood-driven elderly labor demand exceeds half.
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