"Are Only Youths Citizens?"... The 4050 Generation Boils Over Financial Support

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[Asia Economy Reporter Buaeri] As financial support policies targeting young people pour in, complaints of "reverse discrimination" are emerging mainly among the middle-aged 4050 generation. There is dissatisfaction that support for the middle-aged and older generation, who actually play the role of the economic backbone, is insufficient.

According to the financial sector on the 28th, the Ministry of Health and Welfare's 'Youth Tomorrow Savings Account' recruitment is in full swing. This product is a project that supports saving 100,000 KRW per month with the government adding an additional 100,000 KRW monthly for three years. At the end of the three-year maturity, the subscriber receives a total of 7.2 million KRW plus interest, combining their own payment of 3.6 million KRW and government support of 3.6 million KRW. Eligible applicants are youth aged 19 to 34 at the time of application (15 to 39 for recipients and near-poor households) with earned income from work or business, belonging to recipient or near-poor households, or youth with household median income at or below 100%.

In addition, the Financial Services Commission is recently considering a plan to allow switching from the Youth Hope Savings to the Youth Leap Account, known as President Yoon Suk-yeol's "100 million won account" pledge. The Youth Leap Account helps young people with earned income save up to 700,000 KRW monthly, with government support ranging from 100,000 to 400,000 KRW, enabling them to build a lump sum of 100 million KRW over 10 years. Both the Youth Hope Savings and Youth Leap Account target youth aged 19 to 34.

As the government rolls out a series of youth support measures, dissatisfaction continues among the middle-aged and older generation. Kim Seong-mo (pseudonym), a worker in his 40s, pointed out, "Isn't it tougher for the middle-aged who are responsible for their family's livelihood?" and added, "But it's hard to find policies for the middle-aged, so it feels like we are only being forced to sacrifice."

Online, middle-aged and older people are also voicing complaints about youth financial support policies, saying things like "Are only young people citizens?" and "Are the 4050s just servants?" The government's recently established 'Debt Adjustment Special Program' for youth also fueled their anger amid controversy over "debt-financed investment (debt investment) forgiveness." This program offers youth under 34 with low credit up to 50% interest reduction and up to three years of principal repayment deferral. Among the middle-aged, there was backlash saying, "Are we paying taxes to cover young people's speculative funds?" In fact, a survey by the polling agency Media Real Research of 3,663 adult men and women found that 7 out of 10 respondents considered the interest reduction for debt-investing youth as "reverse discrimination."

There are also concerns that while the government focuses only on youth measures, the economic backbone of the middle-aged is collapsing. According to Jin Sun-mi, a member of the Democratic Party of Korea, the total household loans of those in their 40s and 50s reached 1,014 trillion KRW (as of the end of March), accounting for 54.3% of all household loans. Especially, their household loans have continued to increase steadily over the past three years. The year-on-year growth rates of household loans for those in their 40s and 50s were 5.1% in 2020 and 4.5% in 2021.

Notably, since last year, the total household loans from the secondary financial sector for those in their 40s and 50s have been increasing faster than those from banks. At the end of December last year, bank household loans increased by 3.3% year-on-year, while the secondary financial sector grew by 6.1%. The proportion of multiple debtors among the 40s and 50s was also higher than other age groups. There were 2,561,909 multiple debtors in their 40s and 50s, accounting for 26.7% of debtors in that age group (9,605,397), which is higher than the overall multiple debtor rate of 22.6% across all age groups.

Rep. Jin said, "A red light has turned on for household loans among those in their 40s and 50s, and most of them are excluded from the new government's financial support policies, leaving them isolated," adding, "Since the insolvency of the 40s and 50s could pose a risk to the entire national economy, it should be considered along with other generations."

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