[The Editors' Verdict] Real Estate, Jobs, Income, Assets, Debt, and the Struggling Livelihood

Real estate is still hot. So hot that many people have given up and just live with it. Housing prices have skyrocketed, doubling in Seoul in 2019 compared to 2017, and tripling by 2021. Even if the government or public institutions say it’s a certain percentage increase, it’s hard to believe. What’s the point if you haven’t actually visited or checked the asking prices? It’s no exaggeration to say that all social conflicts now stem from real estate or housing.

The same goes for jobs. You should go and check for yourself; just looking at statistics makes it seem like there are many jobs. The government keeps claiming that jobs are increasing daily, but in reality, there are no jobs. Only cheap jobs paying around 200,000 won supported by government budgets or temporary jobs given to university students who can’t find employment remain. Part-time jobs at coffee shops, convenience stores, and game rooms have improved slightly compared to last year, but the competition rate still exceeds 100 to 1. Have you ever imagined that even part-time jobs have a 100 to 1 competition ratio?

Income and assets have diverged in a K-shaped pattern since COVID-19. Without jobs, there is no income; without home ownership, there are no assets. In such situations, statistics are always brought up?claims that jobs have increased, incomes have risen, or home ownership has grown. These statistics often use averages or medians. But what about the lower percentiles? The upper percentiles? People have to live on their income, but since they cannot, they either use leftover money or borrow to jump into the stock market or the coin market. What happens if these markets crash? They have no choice but to end up on the streets. This is why policies must be fundamentally designed assuming the worst and considering vulnerable groups.

Now, there are no jobs and no assets. Therefore, there is no retirement. So how do people live? With debt. They borrow money to enter places where they can still make a little profit or gain some benefit from the debt itself. Real estate investment? The amounts are so large that whether it’s debt or anything else, it’s just a dream. Then they move to the relatively easier-to-enter stock market or the gambling-like coin market. After all, they just need to cover living expenses with debt.

Looking at the statistics released by the government, loans are increasing, so new methods are used to control household debt. First, they tighten loans to prevent buying real estate, then make investment impossible. If they further reduce loans here or quickly apply legally mandated maximum interest rates that don’t fit the market, vulnerable groups and those earning income through loans will suffer even more. Meanwhile, prices are rising very quickly. At the beginning of the COVID-19 crisis, prices were at least normal, but due to base effects and production disruptions, the perceived inflation rises much faster. Although economic growth is claimed, it has nothing to do with individuals. Jobs are not increasing, and wages remain stagnant. This is natural. Last year, foreign workers could not enter the country, and even recently, entry has been difficult. Since they cannot enter, prices inevitably rise at the time of harvesting agricultural products. The crops were left unharvested. Also, the jeonse (long-term lease) prices, which have a large weight in inflation, are soaring at a frightening pace. The recent increase in inflation rate figures is also a phenomenon of this. Livelihoods are not functioning properly now, and the people are struggling. Please, go to the field, check, compile statistics, and provide explanations.

Kim Sang-bong, Professor of Economics, Hansung University

This content was produced with the assistance of AI translation services.