"COVID-19 Causes 210,000 Drop in Labor Demand for Simple Labor and Service Jobs by 2025"

KDI, Employment Structure Changes Caused by the COVID Crisis and Future Prospects

[Sejong=Asia Economy Reporter Kim Hyun-jung] Following the spread of COVID-19, it is projected that the demand for simple labor and service jobs will decrease by 210,000 people by 2025 due to changes in the employment structure. Analysis also suggests that labor demand among those in their 60s, who have a high proportion of related jobs, could decline significantly. It is explained that government policies such as lifelong learning and employment training are necessary to ensure labor supply aligns with these changes.

On the 9th, Professor Eom Sang-min of Myongji University’s Department of Economics and the Korea Development Institute (KDI) Economic Outlook Office released a report titled "Employment Structure Changes Caused by the COVID-19 Crisis and Future Prospects" containing these findings.

According to Professor Eom, simulation results indicate that by 2025, the employment share by occupation will increase by 0.3 percentage points (p) in professional and managerial positions and by 0.5 p in repetitive task occupations compared to existing trends. Conversely, simple labor and service jobs are expected to decline by 0.8 p. Based on the seasonally adjusted employment figure of 27.04 million in the third quarter, it is estimated that technological changes will reduce demand for simple labor and service jobs by 210,000 people, while increasing demand by 70,000 in professional and managerial roles and 140,000 in repetitive task occupations.

By industry, the employment share in high-skilled service sectors is expected to rise by 1.5 p by 2025 compared to existing trends, and manufacturing by 0.8 p. In contrast, low-skilled service sectors are projected to decline by 2.3 p.

Regarding this, Professor Eom explained, "Low-skilled service industries are labor-intensive sectors with a relatively high proportion of workers in simple labor and service occupations, so they are greatly affected by technological advancements that replace face-to-face tasks." He added, "By age group, labor demand with the highest proportion of simple labor and service workers is expected to decrease relatively more."

Furthermore, he advised, "It is necessary to implement policies that alleviate labor supply-demand imbalances caused by changes in the employment structure and protect economically vulnerable groups. Active labor policies such as lifelong learning and employment training should be carried out to ensure labor supply matches changes in labor demand." He added, "Additionally, it is important to strengthen social safety nets by mitigating short-term shocks during occupational transitions and providing suitable jobs for groups facing difficulties in job changes, such as the elderly."

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