Korean miracle 30 years on: did it fail the Korean youth?

At the end of 1980’s Korea has finally started to see benefits of its export-oriented model: the number of goods the country was producing for international markets and their technological complexity grew, it was engaged in large scale construction projects in the Middle East, hosting Olympics and stood in the verge of democratization. Wages were rising, unemployment falling, social services continuously improving to reach to the level of advanced countries. In historically short period, less than 30 years, Korea has performed remarkably well on distribution of wealth too, as it managed to create a substantial middle class. Surveys done at the end of 1980’s showed that more than 70% of population thought they belonged to the middle class.

But 30 years after, children and grand-children of those who worked 6-day a week of more than 70 working hours and went to streets to win the right to choose their government no longer can enjoy a guaranteed employment with full benefits like their parents and grandparents did. Korea has changed from a jobs abundant to a jobs poor country. So much so that  a ‘jobless growth’ term is used to characterize country’s economic expansion in recent years.

Statistic reveal a grey lining under the glitz of Hyundai and Samsung, K-pop and K-beauty. 11.3% of youth in the age group 15-29 are unemployed. The real situation may be even more critical with 1 out of 4 not being able to find a job. 80% of the young people would live the country for US, Canada or New Zealand given an opportunity. And many young people choose to leave or do not come back after after completing their degrees in schools abroad. Those who stay in Korea say they are a generation of 3 Gs, or three give-ups: they have to give up marriage, children and home ownership because they are expensive. 

So, Korea has developed economically but currently cannot offer more jobs for its youth despite the overall dynamism of its economy. One of the reasons for this is that development policies launched half a century ago at the turn of 1960’s did not focus on providing sustainable employment opportunities in the long run. Neither they took into account changing nature of jobs in the future and ways to adapt to them. Development reforms in the first place aimed to create a strong, internationally competitive and effective business sector. And they succeeded in this: performance of Korean industrial groups remains strong and as jobs inside the country decrease operating profits of companies continue to grow.

During the course of development unemployed labor was considered as an unlimited input and efficiency of their use by corporate sector was not a major concern. Companies maximized use of cheap labor in the push for international markets and gradually substituted labor by machines or by cheaper labor through transfer of production overseas. This lead to a current day employment gaps in domestic economy which are difficult to fill due to heavy dependency of the Korean economy on its corporate sector. 

The problem of unemployment is complicated by the fact that a vast pool of human capital that was created through massive investments by the Korean government remains idle or leaves the country. If this human capital is not applied to the effect it becomes a loss multiplying negative sides of youth unemployment. 

Situation in Korea shows what problems could occur in an economy after it had realized successful development reforms. This could happen in any country that steps on a path of industrial development if issues of jobs quality and jobs availability are not included into development packages at early stages of planning. It is already not enough to re-direct labor from agriculture to industry but it is important to envision future shifts in labor demand as structure of economy evolves. 

As youth unemployment becomes a global issue, perhaps it is the right time to start a global discussion about how to tackle future unemployment arising as a result of structural shifts in an economy through development policies.

Another important issue is to implement measures that help to enhance adaptability of the current generations of youth to changes in job markets and the nature of jobs. In other words, it is necessary to teach people how to adapt their skills to new economic realities and, importantly, how to adapt their minds to new economic realities.

‘When we were young we we were taught that if we didn’t go to university we would be jobless losers. So we all studied hard. But reality did not bring jobs to many of those who studied. Perhaps, we should start telling our kids, there’s no one route to follow. They don’t have to take our route to be successful.”

These are the words of one of the Korean parents but they resonate with the idea of teaching change, teaching personal growth in the era of changes that I am trying to bring forward.

How to do that? One possible solution could be to include courses on growth mindset into school and university curriculum. Such courses can help young people to understand an idea of active life-long learning. We teach children about healthy eating and exercise for the noisy and we should do the same for their skills.

Recent studies has found that human brain can develop like a muscle. This quality of brain is called neuroplasticity. Neuroplasticity allows humans to acquire and grow new skills so they do not have to spend whole life with same skills learnt at early stages of life. With neuroplasticity they can revise skills according to their needs and goals at a particular period of life.

Telling young people that they will need to change and they actually can change can help them to start adaptation to new economic realities. Such adaptation is important because an inability of a human being to find his or her place under new economic situation could potentially create whole generations of unhappy and depressed. This would be a tremendous loss to states and humanities and ultimately devalue efforts and resources brought to raise these generations. Inability to adaptation is a risk to welfare and a serious obstacle to sustainable growth.

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