[Edaily Reporter Kim Kook Bae ] As the government draws up a roadmap to realize “equal pay for work of equal value,” some observers point out that, in addition to reducing unreasonable wage gaps, the government must also broaden the pathways for young people to move into better jobs.

This is because it is becoming increasingly difficult for young people who start out at small and medium-sized enterprises (SMEs) or in unstable jobs to move into stable positions, such as those at large corporations, even after building up their careers. The argument is that, even for those who begin their careers at SMEs or in non-regular positions, wage systems must be improved and career development support provided in tandem to ensure they are compensated in line with the skills they have acquired and the responsibilities they have assumed.

According to the report “Sluggish Youth Employment and Policy Challenges” released on the 26th by the Employment Trends Team of the Bank of Korea’s Research Department, the rate at which young people move from the secondary labor market to the primary labor market is estimated to have fallen from 3.51% in 2014–2019 to 1.63% in 2023–2024. The Bank of Korea classified regular employees at private companies with 300 or more workers as the primary labor market, and all other private-sector wage earners as the secondary labor market. This finding is based on an analysis of data from the Youth Panel survey covering non-students aged 23 to 28.

Conversely, the rate at which young people who had already secured stable jobs remained in their existing positions rose from 81.8% to 86.9% over the same period. This reflects the impact of companies adjusting their workforce by retaining existing employees while reducing new hires. In effect, young people who have secured stable jobs are holding onto them, while those who have not are finding it increasingly difficult to enter the workforce later on.

As the demand for entry-level jobs shrinks due to the spread of artificial intelligence (AI), companies are increasingly favoring candidates with prior work experience. An analysis by the Bank of Korea of regular employment among young people aged 25–29 who had left school showed that the number of first-time job seekers per 1,000 people fell slightly from 48 in 2014–2019 to 45 in 2023–2026. In contrast, the number of young people with prior work experience securing regular employment rose from 102 to 121 during the same period.

Although the youth unemployment rate has fallen compared to past periods of weak employment, the quality of employment has deteriorated. From January through September of this year, the proportion of temporary and daily workers among the employed youth (ages 15–29) stood at 32.6%, up 1.9 percentage points from 2022 (30.7%). The Bank of Korea analyzed that there has been a growing trend of “downward employment,” where young people lower their expectations to secure a job rather than waiting for stable employment.

Researchers expressed concern that if this structure persists, improvements in youth employment could be slow to materialize even if the economy recovers and companies increase hiring. This is because if mobility within the labor market becomes difficult, young people may lose opportunities to build the job skills they need. The Bank of Korea diagnosed that the “lock-in effect”—where young people remain stuck in the secondary labor market—is intensifying.

Some observers point out that reducing the wage gap alone is insufficient to resolve this dual structure in the labor market. They argue that barriers to job mobility must be lowered so that the experience and skills gained at small and medium-sized enterprises (SMEs) are recognized by other companies as well.

The Bank of Korea viewed the rigid, seniority-based wage system and high levels of employment protection as factors that increase the burden on companies when hiring new employees. The Bank’s research team suggested, “We must establish an institutional foundation that allows young people to smoothly enter and move within the labor market,” and recommended a shift to a job- and performance-based wage system.

Jeong Heung-jun, a professor in the Department of Business Administration at the Seoul National University of Science and Technology, said, “We must create a system where similar work receives similar compensation,” adding, “While wage differences based on company size or payment capacity are inevitable, the gap in Korea is excessively large.” He further emphasized, “We must shift from a seniority-based wage system to one that compensates based on the value of the job,” adding, “Once such a compensation system is established, labor market mobility will also become more active.”