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When Moon Jae-in became South Korea’s president in 2017, he promised to tackle income inequality and help smaller companies compete with domestic conglomerates like Samsung. He also pursued intra-Korean diplomacy that paved the way for direct U.S.-North Korean nuclear talks. But trade tensions between the U.S. and China, combined with slackening global demand for electronics, has hobbled Mr. Moon’s economic agenda, particularly among young job seekers.
Some of those job seekers are looking beyond South Korea for opportunities. A government program that since 2013 has placed thousands of young workers in overseas jobs also raises concerns about a brain drain if domestic job creation doesn’t pick up. “We have a huge number of educated youth,” says Jae-soo Yoo, a government official in Busan. “If they can’t find work here, they will take their dreams abroad.”
Mr. Moon’s allies hope that detente on the Korean peninsula could eventually boost trade and investment. That may be some way off, though, and Mr. Moon’s ruling party faces a tough fight in legislative elections next April. He also faces a petition calling for impeachment. An improved economy might lessen the pressure and give young workers more reason to stay in South Korea.
Two broad topics tend to dominate the news in this capital city of almost 10 million people. One involves the ongoing diplomatic talks between South Korea and North Korea and related coverage of the potential for another U.S.-North Korea summit. The other concerns President Moon Jae-in’s efforts to invigorate the South Korean economy.
For Ye-jin Choi, a second-year chemistry and nanoscience student at Ewha Womans University, the reports about North Korea and its leader, Kim Jong Un, amount to background noise. She wants Mr. Moon to spend less time courting his counterpart to the north and more time striving to create jobs for her generation.
“The president and his administration need to take one step away from foreign affairs and focus a little more on the country’s economy,” Ms. Choi says. An unemployment rate of nearly 11% for South Koreans ages 15 to 29 – more than twice the overall rate – has her worried about the job market she will enter after graduating in 2021.
“My first priority will be trying to work here,” she says. “But if after a year or so I’m still unemployed due to serious economic issues, I believe there would be better opportunities for me outside Korea.”
Her perspective reflects a gathering frustration with Mr. Moon among young South Koreans as Asia’s fourth-largest economy sputters. Sluggish job growth and a decline in exports of semiconductors and other Korean goods – a casualty of trade tensions between the United States and China – has intensified pressure on Mr. Moon to deliver on his economic agenda.
Mr. Moon pledged to enact reforms and redress income inequality when he won an election two years ago after the ouster of then-President Park Geun-hye amid a corporate corruption scandal. He called for improved wages and working conditions and a reduced reliance on Samsung, Hyundai, and other conglomerates known as chaebols to propel growth.
Since taking office, he has sought to spur hiring and production at small and midsize companies by offering tax subsidies, raised South Korea’s minimum wage by more than 25%, and cut the maximum working week from 68 to 52 hours.
The moves have failed to avert mounting job losses in manufacturing, construction, retail, and other sectors. The country of 51 million people added less than 100,000 new jobs last year, and the increased minimum wage has caused some small companies to freeze hiring for low-level and part-time positions. Others have closed.
The career forecast appears darkest for young adults in a country where more than three-quarters of high school graduates enroll in college. A recent survey by a South Korean recruiting firm found that only 1 in 10 graduating university students had lined up a full-time job, stoking concerns among public officials of a nationwide brain drain.
“We have a huge number of educated youth,” says Jae-soo Yoo, vice mayor of economic affairs in Busan, the country’s second-largest city. “If they can’t find work here, they will take their dreams abroad.”
Mr. Moon will meet with President Donald Trump in Seoul this weekend after the U.S. leader departs the G-20 summit in Japan. The two leaders plan to discuss possibilities for reviving negotiations with Mr. Kim about ending North Korea’s nuclear weapons program.
The talks stalled after Mr. Kim and Mr. Trump held a second summit in Vietnam in February, following their initial meeting last year. Shin Beomchul, a senior fellow at the Asan Institute for Policy Studies in Seoul, argues that Mr. Moon has devoted his attention to nuclear diplomacy at the economy’s expense.
“This government focuses too much on North Korea. The focus should be on this country’s economic relationship with the U.S. and Japan,” he says, referring to two of South Korea’s biggest trading partners.
Yet the fate of Mr. Moon’s economic strategy might depend on his ability to coax Mr. Kim and Mr. Trump toward a diplomatic resolution. A nuclear deal could fortify inter-Korean ties and, over time, boost bilateral trade and economic development.
Supporters of Mr. Moon, who replaced two of his top economic aides last week, assert that he could quiet his critics by emphasizing the link between his diplomatic and economic policies.
“Having better relations between South and North Korea would have significant impact on the economy and create jobs,” says Spencer Kim, co-founder of the Pacific Century Institute, a nonprofit policy and research firm that works with countries throughout Asia. “Now, is the Moon administration doing a good job of explaining that? No.”
A mile from the Blue House, the president’s official residence in Seoul, Hyun-woo Park works in a gift shop in the cultural district of Insadong. After earning a degree in mechanical engineering last year, he sent out more than 50 applications to companies in the capital and other cities. A handful of interviews yielded little more than disappointment.
“I think trying to have peace with North Korea is the right thing,” he says. “But I didn’t go to university because I want to be a cashier.”
A public relations loser
Mr. Moon’s approval rating has fallen from a high of 83% soon after the first summit between Mr. Kim and Mr. Trump to below 50%. Much of the public discontent arises from an economy expanding at its slowest pace since 2012. Chung-in Moon, a special adviser to the president, disputes the portrayal of Mr. Moon as preoccupied with North Korea but concedes a political reality.
“Talking about denuclearization is a public relations gain in South Korea,” he says. “Talking about the economy is a public relations loser.”
In 2013, South Korea launched an overseas jobs program that has helped almost 16,800 adults under age 29 find work in Japan, the U.S., and dozens of other countries. Officials cast the initiative as a short-term antidote to unemployment that enables recent graduates to gain experience that they can parlay into a job back home in a year or two.
But the program’s rising popularity as the economy stagnates – the number of workers placed abroad has more than tripled since 2013 – suggests that holding a job outside South Korea could turn into a long-range solution for a generation of educated workers.
“We have a lot of unemployed young people in Busan,” says Mr. Yoo, the vice mayor. The city’s 20 universities attract students from across the country, and after graduation many return home, work unskilled jobs, or head abroad, unable to find a foothold in their preferred fields in South Korea. “We are no exception to what’s happening across the country.”
Busan operates the world’s fifth-busiest shipping container port. Last year, Mr. Moon announced a plan to spend the equivalent of $3.7 billion to create 50,000 jobs for young adults and for laid-off workers in Busan and elsewhere in the country’s southern region, where a yearslong decline in trade has hurt the shipbuilding and auto industries.
Mr. Yoo, who supports the president’s overtures to North Korea, speculates that improved relations could lift Busan’s economy through an increase in manufacturing and shipping traffic to and from the north, widening the job market for young workers. “But right now,” he says, “we don’t know when that will happen.”
Testing support in legislative election
Voters will offer judgment on Mr. Moon’s policies next April, when his liberal coalition will try to retain power in the National Assembly. Given the president’s sagging approval ratings, analysts predict that a shift in the legislative balance would end his chances of reviving and expanding trade with North Korea.
“If there’s not a [trade] deal soon, the door will completely close by early next year,” says Jeonghun Min, a professor of American studies at the Korea National Diplomatic Academy in Seoul.
The exasperation of young adults over the economy serves as a kind of backhanded compliment to Mr. Moon, who has handled the North Korean crisis deftly enough to allow them to fret about their careers instead of war.
Ms. Choi, the second-year university student, credits him for raising the minimum wage despite its adverse effect on some businesses and his plan to subsidize hiring of young workers. At the same time, she takes the measure of the country’s job market – and her future – without illusion.
“If the economy is still very unstable by the time I finish my education,” she says, “I am definitely considering moving out.”
Reporting for this story was made possible by a travel fellowship provided through the East-West Center.