First Salary Less Than 2 Million Won... 2030 Facing Mounting Debt [Heo Midam's Youth Report]

In the COVID era, 2 out of 5 job seekers "have debt" with an average of 32.87 million KRW
Even after employment, 3 out of 4 earn less than 2 million KRW as starting salary
Experts say "Young people's reasons for borrowing vary... including living expenses"

[Image source=Getty Images]

Editor's NoteHow is your youth remembered? From teenagers to college students and office workers, we deliver the joys and sorrows unique to 'youth.'

[Asia Economy Reporter Heo Midam] "Even if I get a job with difficulty, I feel overwhelmed about when I can repay all my debts."

Amid the prolonged COVID-19 pandemic and the intensifying employment winter, the debt of young job seekers has surged rapidly since COVID-19, becoming a social issue. Facing difficulties in finding jobs and a reduction in part-time positions due to social distancing measures, they have been increasing loans for livelihood purposes.

Young people plan to pay off their debts with income after employment, but even after breaking through the difficult job market, many first jobs pay less than 2 million KRW per month, making repayment challenging. Experts suggest that active youth employment policies are needed to create quality jobs.

Customers are receiving consultations at a loan counter of a bank in Seoul. The photo is unrelated to specific expressions in the article. [Image source=Yonhap News]

Job seeker Lee (25) said, "These days, I wonder if going to college was pointless. Due to student loans, I start my social life in the negative." She added, "Because of COVID-19, job opportunities have decreased compared to before. All the time spent attending university and building my resume feels wasted, and I feel a sense of self-loathing. I think I would have been better off preparing for the civil service exam."

Relatedly, many job seekers like Lee are pushed into debt even before finding a job. On the 4th, 'Saramin' surveyed 1,498 job seekers and found that 2 out of 5 currently have debt (40.5%).

In particular, the amount of debt that job seekers currently have to repay is 32.87 million KRW, an increase of 2.68 million KRW from last year. Compared to 22.61 million KRW in 2019 before COVID-19, this is an increase of 10.26 million KRW in two years.

They used the borrowed money for ▲living expenses such as transportation and food (50.3%, multiple responses) ▲rent for their own room (30.2%) ▲tuition fees (27.9%) ▲employment preparation costs such as academy fees (10.7%). This suggests that due to the COVID-19 impact shrinking the job market, they incurred debt to cover living and education expenses.

Job seekers are checking the job postings on the recruitment bulletin board. The photo is unrelated to specific expressions in the article. [Image source=Yonhap News]

Job seekers most frequently cited "monthly salary after employment" (83.5%, multiple responses) as the way to repay their debts. This was followed by ▲irregular income such as part-time jobs (16.3%) ▲rolling over with another loan (9.9%) ▲savings such as installment savings (7.3%) ▲investment income such as stocks (5.8%).

Jung (26), who hopes to work in the advertising industry, said, "First, I need to get a job to earn money to either repay debt or save. But it's hard to get a job, so I feel overwhelmed. Still, I believe things will improve once I get employed. I won't have to ask my parents for money, and even if it takes a long time, at least I'll have a chance to repay my debts."

In summary, job seekers expect that once they generate income, they can escape the cycle of debt. However, the speed at which debt is increasing is fast, and many cannot repay debts on time due to low wages or short-term jobs even after finding employment.

In fact, 3 out of 4 young people who succeeded in getting a job earned less than 2 million KRW per month. According to the '2021 May Economically Active Population Survey Supplementary Survey on Youth (ages 15-29)' released by Statistics Korea last month, 73.3% of first-time employees earned less than 2 million KRW per month.

Specifically, ▲37% earned between 1.5 million and 2 million KRW, the largest group, followed by ▲23.2% earning between 2 million and 3 million KRW ▲20% earning between 1 million and 1.5 million KRW ▲11.8% earning between 0.5 million and 1 million KRW ▲4.5% earning less than 0.5 million KRW.

Experts emphasize the need for the government to establish youth employment policies to create quality jobs. Professor Kim Taegi of Dankook University’s Department of Economics analyzed, "There are various reasons why young people go into debt. Some borrow for living expenses, but others do so for stocks or to buy a home, among other complex reasons."

He added, "The impact of COVID-19 on youth has been significant. Therefore, employment policies for youth are necessary," and pointed out, "It seems that no government department is properly addressing youth employment issues right now."

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