Temporary Contracts Surge Among 2030s as Job Seekers Shift Away from Permanent Positions

Monthly increase of 100,000 people under 1 year
Company career-focused frequent hiring
Government short-term jobs patching employment

[Sejong=Asia Economy Reporter Moon Chaeseok] The number of short-term contract workers employed for one year or less among young people increased by about 100,000 per month compared to last year. On the other hand, the total number of employed persons slightly decreased. This means that even though the number of job seekers reached a record high of 860,000, the likelihood of young people being hired as unstable contract workers rather than regular employees has increased. Analysts attribute this to rapid industrial restructuring and domestic labor regulations, which have led companies to increase career-based irregular hiring instead of new graduate recruitment. There are concerns that the expansion of employment instability among young people could further weaken the driving force of the Korean economy.

On the 21st, Asia Economy analyzed microdata from Statistics Korea and employment trends, finding that among employed persons aged 20 to 39 in the first half of this year, the average monthly number of those hired on contracts of one year or less was 1,052,000, an increase of 98,000 compared to the same period last year. During the same period, the average monthly number of employed persons aged 20 to 39 decreased by 128,000 from 9,028,000 last year to 8,900,000 this year. Although the total number of employed persons decreased, the proportion of contract workers relatively increased. A Statistics Korea official explained, "While the total employment of those in their 20s and 30s decreased, short-term contract workers increased mainly in retail, wholesale, and business facility management sectors where young people are predominantly employed."

The increase in contract workers among young people is interpreted as a result of changes in the hiring market and a frozen job-seeking market. According to the "2021 May Economic Activity Survey Youth (ages 15-29) Supplementary Survey" released by Statistics Korea the day before, among 4,056,000 respondents who reported having work experience, one-third answered that their first job was a contract position. Additionally, 29.3% (1,188,000) said their first job was a "contract position of one year or less." Choi Young-gi, a visiting professor at Hallym University’s Business Administration Department and former president of the Korea Labor Institute, said, "In the past year, the sector with explosive demand for recruitment was the non-face-to-face platform industry," adding, "The hiring of special employment workers (teukgo) and young temporary delivery workers likely also increased."

Experts also evaluated that the government's approach of patching employment with short-term fiscal jobs contributed to the increase in short-term contract workers. Park Se-jung, a senior researcher at the Korea Employment Information Service, said, "Since there are groups such as women in their 30s with career interruptions who prefer part-time contract jobs, it cannot be concluded that employers hiring contract workers is a definitive trend," but added, "It is true that the government's fiscal job policies have somewhat influenced the increase in the proportion of contract workers among all young employed persons."

In particular, the phenomenon of increasing contract workers was clear even among regular workers, which generally refers to relatively stable jobs. If the contract period is less than one year, the worker is not classified as a regular employee. Accordingly, the number of employed persons with a "one-year contract," the minimum contract period for regular workers, increased by 69,000 from an average of 526,000 per month in January-June last year to 595,000 this year. This category includes apartment managers, face-to-face service workers in food and lodging industries, and public workers engaged in one-year projects. According to the Ministry of Employment and Labor, representative direct job projects with a duration of one year or more include the Ministry of Health and Welfare’s self-support projects and the Ministry of the Interior and Safety’s region-led youth job projects. Yoon Dong-yeol, a professor in the Department of Business Administration at Konkuk University, said, "Most youth jobs provided by the government are short-term jobs lasting less than six months, so the increase in contract workers is inevitable."

The government also acknowledges the ongoing difficulties young people face in finding employment. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated on his social media the day before, "Some indicators of youth employment have clearly improved positively," but added, "It is always heartbreaking that young people still feel the employment situation is difficult in the field."

This content was produced with the assistance of AI translation services.