South Korea's job market is in a state of crisis, and young people are paying the price. Despite the country maintaining relatively low unemployment rates on paper, the reality is far bleaker—most available jobs are low-paying, unstable, or outright exploitative. The core of the issue is South Korea's extreme corporate imbalance: there are too few large companies, and small and medium-sized enterprises (SMEs) are practically unlivable workplaces for most employees. As a result, young job seekers are trapped in a vicious cycle of underemployment, exploitation, and financial insecurity.

1. The Brutal Reality of the Korean Job Market

In South Korea, a "good job" is synonymous with employment at a major corporation. These jobs come with competitive salaries, robust benefits, and career stability. However, such positions are nearly impossible to obtain because there simply aren’t enough of them. Only 14% of all jobs in Korea belong to large firms—a shocking contrast to 58% in the U.S., over 40% in Japan, Sweden, the U.K., and France. This means that an overwhelming majority of Korean workers are forced into the SME sector, where pay is low, benefits are nonexistent, and job security is a joke.

This problem has only worsened over the past three decades. The wage gap between large companies and SMEs has skyrocketed, yet the number of large company jobs has barely increased. Meanwhile, SMEs have become synonymous with long working hours, low wages, and constant layoffs—conditions that make them utterly unappealing to job seekers. The result? A paradox where companies complain of labor shortages while job seekers remain unemployed.

2. Why Are There So Few Large Companies in Korea?

The root of the issue is simple: South Korea has too few large companies. Compared to other industrialized nations, Korea has an abysmally low number of major firms relative to its economy. In a hypothetical scenario with 10,000 companies, the U.S. would have 62 large corporations, Germany 44, and Japan 39. Korea? Only 9. This is an undeniable failure of economic policy, and the consequences are severe.

1) Overregulation and Government Interference

One of the biggest obstacles to corporate growth in Korea is its crippling regulatory environment. Once a company reaches a certain size, it is immediately hit with a flood of government restrictions—up to 342 regulations that small companies don’t have to deal with. These include excessive reporting requirements, mandatory disclosures of stock ownership, and intrusive government oversight of company leadership.

This is not just bureaucratic hassle; it actively prevents companies from expanding. Many mid-sized firms intentionally limit their growth to avoid crossing into "large company" status, where they would be crushed under government scrutiny. Instead of encouraging businesses to scale up, Korea’s system effectively punishes companies for becoming successful.

2) Crushing Corporate Taxes

South Korea also imposes some of the highest corporate tax rates in the world, further discouraging business expansion. Most developed nations have flat corporate tax rates, meaning companies pay the same percentage regardless of size. Korea, however, taxes larger companies at significantly higher rates. The result? Many businesses prefer to stay small rather than face heavier tax burdens.

This problem is so severe that 271 companies that grew into mid-sized firms in the past five years have intentionally shrunk back into SMEs to regain tax and regulatory benefits. In a recent survey, 52% of these firms cited high tax burdens as their primary reason for scaling down. Simply put, Korea’s policies make corporate growth a liability rather than a goal.

3. The Illusion of SME Support

On the other side of the spectrum, the Korean government has built an economic system where weak and unproductive SMEs are artificially propped up with government aid. Instead of fostering competitive businesses, policymakers have created a network of zombie companies that only survive thanks to endless financial handouts.

For example, government-backed loans and subsidies have allowed thousands of inefficient, failing businesses to remain open. Many of these companies operate at a loss, relying entirely on taxpayer-funded bailouts to survive. This distorts the job market, making it even harder for truly competitive SMEs to thrive.

Additionally, the government has legally restricted certain industries to SMEs, barring large firms from entering and improving these markets. While intended to protect small businesses, this policy stifles innovation and keeps wages low.

4. The Consequences for Young Job Seekers

The combination of too few large companies and too many weak SMEs has created a job market that is fundamentally hostile to young workers. The consequences are dire:

Low Starting Salaries: Many young Koreans graduate from top universities only to find that the only available jobs pay barely above minimum wage.

Delayed Employment: It is now common for young job seekers to spend years looking for stable employment, only to settle for low-paying temp jobs.

Financial Insecurity: With wages stagnating and the cost of living rising, many young Koreans have no choice but to delay major life milestones like marriage, homeownership, and having children.

Brain Drain: More skilled Koreans are leaving the country in search of better opportunities abroad, further weakening Korea’s long-term economic outlook.

5. The Harsh Reality: Korea’s Economy Is Stagnating

The long-term consequences of this imbalance are disastrous. The current system locks talent into dead-end jobs, discourages innovation, and keeps Korea’s economy from growing. As a result:

Productivity remains low because too many businesses survive off subsidies rather than genuine competition.

Large companies face no real competition, allowing them to dominate the market with minimal innovation.

Korea’s economy becomes increasingly dependent on a handful of chaebols, making it vulnerable to economic shocks.

6. The Way Forward

Unless major reforms are made, Korea is on track to create an entire generation of overqualified, underemployed workers with no future. To fix this crisis, the government must:

Deregulate corporate expansion to allow more companies to grow without fear of excessive regulation.

Reform SME policies to eliminate zombie businesses and encourage genuine competition.

Reduce corporate tax burdens to incentivize companies to expand rather than shrink.

Improve working conditions in SMEs to make them viable alternatives to chaebols.

Conclusion: A Grim Future Without Change

South Korea’s labor market is broken. The dream of stable employment is becoming increasingly unattainable, and without drastic changes, the situation will only get worse. Young job seekers are stuck in a system that actively prevents economic mobility, forcing them into a cycle of underpaid labor, delayed careers, and financial despair.

Unless Korea’s government takes bold steps to increase the number of large companies and reform its failing SME policies, the future of the country’s workforce is bleak. At this rate, Korea is not just at risk of economic stagnation—it is heading straight into a lost generation of highly educated but hopelessly underemployed workers.