People still feel trauma from 1997 crisis
Applicants leave Kyungbock High School in Seoul after taking the grade 9 public official exam this April. A record number of more than 220,000 people applied to take the test this year amid the desire for stable jobs. / Yonhap
By Lee Min-hyung
More than half of the public here still remember the 1997 Asian financial crisis as one of the toughest economic downfalls that brought a dramatic shift in people’s way of life.
Twenty years ago today, the country was forced to ask for a bailout program from the International Monetary Fund (IMF) after undergoing an unprecedented currency slump and stock devaluation.
According to a recent survey from the Korea Development Institute (KDI), 57 percent of 1,000 surveyed adults said the 1997 crisis is the toughest economic hardship that hit the nation during the past five decades.
The crisis caused a number of small- and medium-sized enterprises and conglomerates here to go bankrupt, leaving the nation in a state of financial chaos. Those who did not file for bankruptcy, however, also had to carry out large-scale layoffs and major restructuring to survive the nightmarish economic crisis.
With one after another companies asking for bankruptcy during the time, the government had no choice but to seek a bailout worth $20 billion (21.99 trillion won) from the IMF.
Two decades have passed since the economic turmoil gripped the country, but people still have negative and traumatic images of the crisis. More than 40 percent of the respondents named a nationwide gold-collecting campaign as the most memorable and symbolic event to represent the crisis.
The public joined hands to collect gold, seeking to play a part in getting the nation back on the right track. This shows how serious the sense of economic crisis had been during the period.
Paradigm shift in employment
A quarter of the people surveyed also chose the massive payroll cuts as a representative image when remembering the crisis.
Four out of the respondents noted that at least one of themselves, their parents or siblings lost their jobs by the time the government received a rescue fund from the IMF. A sense of uncertainty has since prevailed in the local job market.
This was in contrast to the period before the financial crisis. Driven by rapid industrial growth, most college graduates were easily able to get jobs back in the early to mid-1990s. But as renowned conglomerates such as Hyundai, Kia and Daewoo pushed for comprehensive restructuring to overcome the crisis, uncertainty has become a new catchword to describe the local job market.
Young people have since preferred stable jobs that guarantee lifetime employment, rather than opting for those with merit-based and higher-paying jobs at conglomerates.
“I am often frustrated when hearing those in our parents’ generation easily got jobs from leading conglomerates,” said a 27-year-old employee at a Japanese shipbuilder. He said he decided to join the company simply because most Japan-based companies guarantee job security.
“The job market today is so tough and competitive. The only thing I can do is apply to as many companies as I can and select the one that guarantees stability,” he said.
The KDI statistics also noted that 88.8 percent of respondents said the worst social problem following the financial crisis is the rise of irregular workers.
“Most college graduates are reluctant to work at potential-laden startups. They simply want to be employed at stable companies such as those run by the government,” the employee said. “I have spent almost half of my lifetime in the United States, which is home to innovative venture firms and state-of-the-art technologies. But in Korea, only a few collegians seem to dream of running their own companies. The reason is simple; the social atmosphere that says stable jobs are the best jobs.”