Before AI Takes Your Job, Do This: Lessons From Germany and Japan
As artificial intelligence rapidly reshapes industrial structures, experts say the approach to labor market uncertainty must fundamentally change. They argue that policymakers need to shift from traditional “job protection” policies to preemptive measures focused on maintaining workers’ “employability.”
The Korea Employers Federation (KEF) on Sunday released the first installment of its “Employment Stability in the AI Era” series — a commissioned research report titled “Overseas Cases and Policy Tasks for Employment Stability in the AI Era,” authored by Kwon Hyuk, a professor at Korea University’s Graduate School of Labor Studies.
“Germany Prevents, Japan Redeploys”: Advanced Economies’ Employment Strategies
Germany stands out as the most notable case. The country shifted from a “reactive” model of supporting workers after they become unemployed to a structure that prevents job loss while workers are still employed. Germany expanded vocational training support from the unemployed to current employees, designing a system for preemptive responses to industrial change.
The German government covers up to 100% of tuition for workers participating in qualifying external training programs and partially compensates wages depending on company size. To reduce income gaps during training periods, it also operates a “competency-building allowance” that pays up to 60% of average wages — or 67% for workers with children. The key feature is a dual safety net that enables both companies and workers to participate in training without financial burden.
Japan is pursuing employment policies centered on reskilling and cross-industry workforce mobility. The country notably encourages worker-driven participation in education and provides additional support based on outcomes.
The Japanese government covers half of vocational training costs upon completion and offers additional subsidies when workers obtain certifications or secure employment within a set period. For workers preparing to change careers, it supports a substantial portion of their existing salary for up to three years to minimize income disruption.
Japan also operates a “secondment-style dispatch” system that sends workers from legacy industries to other companies to acquire AI and digital skills. To incentivize corporate participation, the government provides phased subsidies for wages and initial costs.
Singapore is also strengthening retraining policies with the goal of boosting AI capabilities across its entire population. The city-state provides education credits to citizens above a certain age and offers 400 million Singapore dollars (approximately 460 billion won, or $340 million) in financial support to encourage companies to redeploy workers through job redesign rather than layoffs.
Korea Also Needs Institutional Reform Centered on ‘Employability’
The report stressed that Korea, too, must expand its employment policy focus from “job retention” to “employability maintenance,” drawing on these overseas examples. It proposed building a customized vocational training system and linking education and employment support programs currently scattered across different ministries to establish a lifelong learning system.
The report also called for greater flexibility in designating employment crisis zones and special employment support industries, and for strengthening the link between employment stabilization programs and vocational development programs to enhance policy effectiveness. It added that a legal framework for establishing an employment stabilization fund to cope with industrial transitions is also necessary.
“As the AI-driven industrial transformation accelerates, employment instability in the labor market is intensifying,” said Lee Sang-ho, head of the economic division at KEF. “We must absorb the shock of industrial transition and solidify the employment safety net by strengthening vocational education through public-private cooperation and rebuilding the financial support infrastructure.”