Office workers in Yeouido stepping out to eat during their lunch break (Image courtesy of Yonhap)
SEOUL, Jun. 26 (Korea Bizwire) – A new study predicts that South Korea’s declining birth rate and shrinking population could lead to a significant labor shortage in key sectors by 2042, with over 600,000 fewer workers in restaurants and retail compared to 2022 levels.
The forecast was presented by professor Lee Chulhee of Seoul National University at a seminar titled “The Impact of Population Decline on the Labor Market and Response Measures,” held on June 25 at the Federation of Korean Industries (FKI) Tower in Seoul. The event was jointly organized by the Korea Economic Research Institute and the Korea Labor Institute.
Lee projected a broad reduction in the workforce aged 20-74 across various industries by 2042, compared to 2022 figures. This decline aligns with the expected drop in South Korea’s total population from 51.67 million in 2022 to 49.63 million in 2042.
The food service and bar industry is anticipated to be the hardest hit, with a projected decrease of approximately 669,000 workers over the next two decades. Retail trade (excluding automobiles) could see a reduction of about 610,000 workers, while wholesale and brokerage businesses might lose around 237,000 workers.
The study also highlighted that the supply of highly educated workers is likely to decrease significantly in retail and educational services, while lower-skilled labor shortages are expected to be most severe in the food service, bar, and agriculture sectors.
However, some industries are projected to see an increase in labor supply, including social welfare services (291,000 workers) and architectural, engineering, and other scientific and technical services (95,000 workers).
To address these challenges, Lee suggested increasing the economic participation rates of women and older adults. During the discussion, professor Yang Jung-ho of Sungkyunkwan University advocated for more focused budget allocation and the establishment of a Population Strategy Planning Department with a minimum 10-year ministerial term to ensure consistent long-term policies.
Chung Chul, head of the Korea Economic Research Institute, emphasized that population decline not only makes it difficult for companies to secure workforce but also leads to a shortage of skilled workers and a decline in innovation and productivity due to an aging population.
He called for a multifaceted approach to address the population decline, including increasing labor market flexibility and expanding the labor supply.
M. H. Lee (mhlee@koreabizwire.com)
