Young people here have always, in general, been brought up the same way ― study hard, go to a private institution after school, learn what everyone else is learning, take an exam and go to a prestigious university. Then, they should get a job at a conglomerate.
This has resulted in an oversupply of overeducated people with no unique set of creative skills that could be useful in the job market.
Unless Korea deals with this fundamental problem in its education, mentoring and parenting systems, youth unemployment will get much worse than it is today. The youth joblessness rate stood at over 12 percent last February, a record high.
To make matters worse, the population of young people is decreasing really quickly, while that of the elderly aged over 65 is rapidly increasing.
The changing demographics will further tighten the job market, and weigh down on productivity and consumption.
Cho said a new strategy is urgently needed.
“We made a terrible mistake by implementing a series of ill-considered policies to address these concerns. And young adults today are paying the price for it,” Cho said.
“We cannot go back and fix it. Unfortunately, the young will have to endure the pain. But there is still hope for our teenagers and children. We need to help them take a different path for the future.”
Cho, who is a professor at Seoul National University’s Graduate School of Public Health, is one of Korea’s leading demographers and the author of “Determined Future,” which is about Korean demographics.
He has consistently advocated that Korea should not approach and try to solve its demographic problems with welfare and fiscal policies.
Lower taxes for working couples and more childcare centers will not help boost the number of newborn babies, which is expected to fall below the threshold of 400,000 this year.
Cho has suggested maintaining a population replacement of above 400,000 because that level will be able to at least sustain the local market.
“Our changing demographics are not a matter of welfare or tax problems. Korea needs to approach these from a diverse point of views from education, the economy, statistics and business among others,” Cho said. “Korea needs a special unit or agency that can exclusively come up with demographic policies like in the United States and Europe.”
Beginning in 2020, Korea’s demographics will change a great deal.
That is when those born in the mid-1990s will enter colleges, which will start to face financial difficulties due to the decreasing number of students because of the low birthrate.
Korea will see an undersupply of students and oversupply of schools, Cho said, adding, “Practically every student will be able to enter college. So there is no need for private education.”
In 2026, Korea will be a super-aging society with more than 20 percent of its population consisting of the elderly.
In 10 to 15 years from now, the number of newborn babies will fall to around 150,000.
Jobs will be tougher to get because the next generation will not only have to compete with artificial intelligence (AI), but also with the growing number of older people who will seek to postpone their retirement amid increasing social costs.
“The decrease in the birthrate will inevitably produce a tougher environment. Against this backdrop, do you still want to raise your kids, run our schools the same way and implement the same welfare and education policies?” Cho asked.
Before finding potential solutions for the next generation, society needs to be aware of three alarming statistics, Cho said.
First, the number of newborns fell to 406,000 last year. This year, it will fall below 400,000 and will continue to shrink no matter what.
Second, the number of singles surpassed that of four-member households in 2015.
Last but not least, more than 80 percent of the population lives in big cities, and more than 50 percent of the population aged 20-49 lives in Seoul.
The first two statistics foretell that the local market will get smaller. Koreans’ consumption patterns will change amid the reduction of family size. They will favor smaller things like apartments and automobiles.
No longer will roads be filled with family sedans, and the value of apartments will fall.
Historical data show that the overall real estate prices here moved in tandem with those of large apartments.
When they fall amid lower demand for large apartments, prices of small apartments for singles will drop too, even though demand for them increases, Cho noted.
Also, the population of the young concentrated mostly in Seoul poses a risk to the rural economy.
The young who moved to Seoul from rural areas have mostly pushed back marriage and having kids due to increasing living costs.
“The rural economy is facing near collapse as the young mostly want to relocate to Seoul. The Seoul government has to take this matter seriously,” Cho said.
The next government must work with the private sector to help the labor market become more flexible, and create more entry-level jobs.
At the same time, its education sector should get rid of its aging and rigid college entrance exam system, and make that flexible too.
“We need to allow a flexible system enabling anyone to go to college anytime after they work,” Cho said.
“Also, a flexible labor market will enable the old to come back to the workforce after they reach their retirement age with a smaller paycheck. We cannot have the next generation bear all the financial burden to support the elderly to receive their pension.”
Korea should encourage the young to work in agriculture and develop it with bio or nanotechnology by giving them free land where they can do so through trial and error.
“This could save the rural economy. Otherwise, Korea should declare the end of its agriculture, and that it will from now on import everything for our food,” he said.
It needs to start building networks with governments in developing markets and create a path enabling the young to secure jobs overseas.
Cho also suggested that parents should no longer force their kids to study at private institutions, but help and guide them to study subjects that can make them unique.
“They need to study something and become unique so that no one else, even including AI, can follow,” he said.