South Korea's central bank warns AI development threatens jobs

The rapid development of artificial intelligence (AI) poses a risk to employment for young people in South Korea, according to a report by the country’s central bank, Bank of Korea (BOK), on Tuesday (18/8).

The BOK report stated that youth employment has continued to decline in industries with high AI exposure, citing membership records from South Korea’s National Pension Service (NPS) and the economically active population survey.

The number of jobs for young people fell by 285,000 over the past four years. Of that total, 94 per cent, or 268,000 lost jobs, were in sectors with high AI exposure.

Youth employment in the information services sector plunged 31.4 per cent over the past four years, while in the publishing, computer programming and professional services sectors, the figures fell by 27.4 per cent, 16.6 per cent and 11.6 per cent respectively.

In contrast to the shrinking job opportunities for young people, employment for workers in their 50s has continued to grow in the same industries, indicating a widening intergenerational gap.

The report stressed that the impact of AI depends on how it is applied. The decline in youth employment was particularly sharp in industries that use AI for automation, which replaces human tasks.

Conversely, when AI is used for augmentation, namely as a tool to assist and enhance human performance, the negative impact on the recruitment of young workers was found to be limited, the report concluded.

The report noted that the impact on employment does not depend on the adoption of AI itself, but rather on whether companies choose to replace or assist human work.