 |
|
Students are shown studying at the Ehwa University library. A report issued by the Hyundai Research Institute said that South Korean youth are suffering from five major afflictions, including shrinking income, higher debt, and increasing fatigue. (Yonhap News)
|
High rates of debt, unemployment are leading to higher stress, depression
South Korean youth are suffering from five major afflictions, a new report says: alienation from work, ballooning debt, shrinking income, spending constraints and increasing fatigue. “As low growth continues in the domestic economy, numerous restrictions are blocking youth economic activity. There are concerns that the continuation of this phenomenon will cause overall economic growth to stagnate and impose a heavier social cost,” said the report, titled “Restrictions on Youth Economic Activity: Five Characteristics and Implications,” which was released by Hyundai Research Institute on Feb. 18. The first major restriction on youth economic activity listed in the report is alienation from work. While the overall unemployment rate has remained between 3-4% since 2010, the unemployment rate among youth (15-29) has been rising over the same period, from 7% to just under 10% (9.9% in 2017). The perceived unemployment rate among youth is 22.7%. The second restriction is increasing debt. The average amount of debt across all households increased by 28.8%, from 54.5 million won (US$50,960) in 2012 to 70.22 million won (US$65,700) in 2016, while the average debt among householders 30 years old and below during the same period increased 85.9%, from 12.83 million won (US$12,000) to 23.85 million won (US$22,300). Increasing scholarships provided by the government caused the debt for those taking out student loans to decrease from 3.7 million won (US$3,500) to 3.2 million won (US$2,990) per capita over the same period, but the amount in arrears remained above 4.9 million won (US$4,580) per capita. The third restriction is shrinking income. Youth householders (30 years old and below) recorded income of 32.66 million won (US$30,500) in 2015, down 4.1% from the previous year, and 32.79 million won (US$32,700) even in 2016, showing that income basically remains static. The increase of non-consumption expenditures (such as taxes and pension premiums) over the same period caused disposable income to decline. Falling income for young people is boosting membership in the so-called kangaroo tribe (referring to people who live with their parents), but the parents’ generation is seeing its income decrease as well. While the number of people in their 60s and above who are employed grew from 3.66 million to 3.88 million between 2015 and 2016, the average annual ordinary income of these households edged down from 2.83 million won (US$2,650) to 2.81 million won (US$2,630). The fourth restriction is spending constraints. Annual consumption spending by youth households (30 years old and below) expanded from around 19.59 million won (US$18,300) in 2011 to 22.99 million won (US$21,500) in 2013 but has contracted thereafter, sinking to 18.69 million won (US$17,500) in 2016. The contraction of youth consumption, the report said, was caused by reduced income, along with the increasing burden of paying for housing and repaying the principle on loans. Finally, there is increasing fatigue. “Fatigue is intensifying among South Korean youth because of the greater academic time investment required to find a job, poor housing conditions and stress-related medical conditions such as depression,” the report concluded. “Addressing the restrictions on economic activity currently facing South Korean youth will require the continuation of efforts to create good-quality jobs and the adoption of plans aimed at helping young people improve and restructure their financial liabilities,” said Hong Jun-pyo, the analyst who wrote the report. “Youth also need more support for stabilizing their residential situation, and there needs to be a greater awareness about the necessity of managing stress-related medical conditions,” Hong added. By Ahn Seon-hee, staff reporter Please direct questions or comments to [english@hani.co.kr]
