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| A woman shops at a grocery store in Seoul, June 27. Korea Times file |
By Lee Kyung-min
Choi Sun-hoo, a father of two living in Sejong, an administrative city south of Seoul, recently began working as a delivery man on weekends. "I'm a salaryman, and my monthly paycheck alone is hardly enough to support my family," he said.
His two children, both middle schoolers, go to private cram schools for Korean, math and English. Their education costs have not been low, but they'd been more or less manageable. But not anymore, because the prices of everything else spiked ― from putting food on the table to maintaining the roof over their heads.
"I mean it's really what they say. Everything went up except my salary," Choi said. "I don't know. My wife told me that she was thinking about taking a job as a cashier at a nearby retail chain mall. I didn't know what to say," he added.
Choi is not the only one who took on a side job to make ends meet.
Shin Ji-seon, a mother of two in her 30s, said she recently took on a part-time job at a coffeehouse.
"I had to do something," she said. "The cost of everything is rising so fast, and I don't think my family can live with my husband's monthly income alone."
These are clear illustrations of how an increasing number of Koreans are pushed to take on more jobs, a result of the steep rise in the cost of living including food, utilities and loan interest rates.
Data from Statistics Korea showed that the number of people working a side hustle stood at 629,610 in May. This is the highest figure to date and up 18.4 percent from a year earlier.
The figure has soared 65 percent compared to 381,314 in January 2020, shortly before the onset of the COVID-19 pandemic.
Behind the rapid increase in the figure is headline inflation, as measured by the consumer price index (CPI). Korea registered a 6.3 percent growth in inflation in July, the sharpest rise since 6.8 percent in November 1998, during the height of the Asian financial crisis.
The year-on-year increase is a further climb from 6 percent in June, when inflation hit a near 24-year high.
This is the first time in 23 years that the figure stood above 6 percent.
It first exceeded 3 percent in October of last year, and has since doubled to the current 6-percent range.
Further sustaining the upward trajectory is a 50-basis-point increase in the policy rate by the Bank of Korea. The central bank raised the key rate by half of a percentage point to 2.25 percent last month, sparking a sharp increase in borrowing rates.
The borrowing rates for unsecured loans offered by Korea's five leading commercial lenders stood between 4.84 percent and 5.59 percent as of July 12. In contrast, borrowing rates for such loans ranged between 3.02 percent and 4.17 percent last August.
Adjustable rates for mortgage loans are as high as 5.4 percent. The figure was as low as 2.61 percent in 2020.
The central bank said that a 25-basis-point increase in the key rate will lead to a 3.4-trillion-won increase in interest. Korea's total household debt amounted to 1,752 trillion won ($1.35 trillion) as of March.
Korea has raised electricity and gas rates incrementally over the past few years, and as many as two more increases are expected before the year's end.
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