By Kim Jae-won
Those in their 20s are bearing the brunt of the economic hardship due from scarce jobs and rising consumer prices, the Bank of Korea (BOK)’s survey showed Tuesday.
The consumer sentiment index (CSI) for those under 30 in age marked 70 in January, the lowest in two years since January 2009.
It is 13 points lower than the average of 83. CSI is an economic indicator based on survey of consumers to gauge how those in a given sample evaluate their economic standard, compared with six months ago.
Readings lower than 100 means that there are more people who think quality of their economic standard is going down than those who think it going up. Vice versa for over 100 readings.
BOK said that high youth unemployment rate and rising inflation pressure affected the reading for 20somethings.
“The figure shows that 20somethings struggled to make their ends meet due to low employment and high inflation,” said Jang Wan-seop, a senior official of the BOK.
Jang said that people in their 20s just started economic activities, so their income increase lagged behind consumer price hike.
Youth unemployment is severe, contrary to the government’s assurances.
According to the Hyundai Economic Research Institute, a private think tank run by Hyundai Group, real youth unemployment reached 22 percent last year, higher than the nation’s official rate of 3.4 percent.
Another BOK data confirmed that 20somethings are under economic pressure to make a living enough to cover their living costs.
According to 2011 household financial statistics, those aged between 25 and 30 had an average 14.5 million won of debts in 2011, up 34.3 percent from a year ago. However, their average income rose 9.3 percent to 31.2 million won during the same period, showing their debts increased about four times comparing to the income.
Experts point out that low income level of 20somethings is key factor, which make the young generation suffer from economic troubles.
“Income has not increased that much for the 20somethings while investment costs, including college tuition, rose drastically. The gap caused structural problem for households in their 20s,” said an economist at LG Economic Research Institute (LGERI).
The LGERI economist suggested the government to expand infrastructures for young entrepreneurs to induce them to open their own businesses, but some say that there is low possibility to succeed as self-employed in the time of low growth.