hankyoreh

“Are you any closer to getting a job?” “When are you going to move out?” “Are you not even thinking about getting married?”

For young people living in Korean society today, which is often sarcastically described as “Hell Joseon,” it’s stressful just thinking about such questions. What makes it so difficult to find a job, a house of one’s own and a lifelong companion?

The Hankyoreh analyzed the lives of youth in the transitional period toward becoming independent economic agents through a month’s worth of receipts. Is it really fair to make glib judgments about these young people’s economic decisions when their monthly expenses show that their debt is bound to increase no matter how hard they work?

Case #1. It was 8:22 pm. Kim So-yun (27, not her real name), a contract worker at a startup in the Jongno district of Seoul, ordered tteokbokki (rice cake smothered in a sweet and spicy sauce) from a delivery app after returning from a 10-day business trip overseas. The meal cost 13,000 won (US$12). “When I got back home from my business trip, my refrigerator was completely empty, and I was so exhausted I didn’t have the energy to fix something to eat. After spending time overseas, I had this craving for spicy food,” Kim said.

A few hours later, at 3 am, Kim ordered some fried chicken through the same delivery app. The price was 17,000 won (US$15.85). “My live-in boyfriend gets home from work late at night. There was nothing to eat at home, so we ordered fried chicken,” she said. After taxes, Kim made 1,245,100 million won (US$1,161) in December, and this month, she spent 1,260,000 won (US$1,175), representing a deficit of 14,900 won. Couldn’t she have made up for the shortfall by not ordering the tteokbokki and fried chicken? “I have food delivered sometimes, but I think of this as buying time and service, not food. “When I get home after working late, I’m just famished, and fixing a meal would mean shopping, cooking the rice and preparing the side dishes… When am I supposed to do all that?”

Case #2. Lim Sang-hyeon (35, not his real name), who works on a continuing contractual basis at a public enterprise affiliated with the Seoul city government, got a haircut at a salon near his house. It cost 20,000 won (US$18.70). “Hard-working people usually get a haircut once a month,” Lim said. Because of his determination to only spend money when necessary, Lim typically eats his meals at the company cafeteria for 2,500 won (US$2.33). He hardly ever buys clothing, either, admitting that he doesn’t pay too much attention to his appearance.

Lim’s typical form of stress relief is buying a hamburger at a convenience store on the way home from work. He made 1.8 million won (US$1,680) in December, and his expenditures that month added up to 1.63 million won (US$1,520), including a 400,000 won (US$370) payment on a bank loan. Even though he will be soon be marrying a woman he has been dating for four years, he is barely able to cover his living expenses, let alone set money aside for marriage.

When asked whether he couldn’t reduce his expenditures, Lim replied, “How could I reduce them any further? This was the first time I went to the salon in four months, and even that was because my friends kept saying I looked like a throwback to the eighties, like someone cramming for the civil service exam.”

Case #3. Han Se-jin (26, not her real name), who is currently trying to get a job as a flight attendant, canceled a concert ticket she had bought online for 86,000 won (US$80). I had really wanted to see the concert, but compared to my income, it was just a ridiculous amount,” she said. But even after getting a refund, Han left the concert ticket in her online shopping cart for a fortnight before ultimately buying it again. She said the concert was not as fun as she had expected.

Han gives piano lessons and does other part-time work as her schedule permits while she tries to find a job. Her income this past December was 600,000 won (US$560), while she spent 775,360 won (US$720), leaving her 175,360 won in the hole. Given her meager income, couldn’t she have forgone the concert? “All month long, I kept buying the ticket and then cancelling it again, and it was really hard on me. I was going back and forth between thinking it was absurd for a job seeker like me to go to a concert and wanting to go to the concert, and in the end, the wanting part of me won out. If I have to write this off as another ‘screw-it expense,’ it’s going to make me so sad,” Han said.

A “screw-it expense,” as the Korean slang phrase “sibal biyong” might be translated, means a stress-induced impulse buy. Some common examples are purchasing cosmetics or other unnecessary items or getting fried chicken delivered to one’s house. Since such expenses typically result from frustration, it’s easy to think they could be reduced, but that doesn’t mean that ‘screw-it expenses’ are a complete waste of money.

Examining the reasoning behind “screw-it” expenses

The spending habits of people in their twenties and thirties who are passing through the transitional period to becoming independent economic agents – like job seekers unsure of when they will get a job, contract employees working for low wages and office workers preparing for marriage at some distant point in the future – demonstrate that they have their reasons for their spending patterns.

In a report titled, “A Study on Developing a Model of Financial Support for Youth in a Transitional Period,” the Seoul Youth Activity Support Center analyzed the lifestyle and financial status of 136 unmarried young people between the ages of 20 and 34 who are working in the capital region (Seoul and Gyeonggi Province). According to the report, the quality of life of young people who are transitioning from education to the workforce, from living with parents to living on their own, is greatly affected by their employment type and residential situation.

The report about the 136 youth in this transitional phase divides their expenditures for one month into the five categories of fixed costs, basic living expenses, preferential spending, relational spending and irregular costs. Fixed costs includes monthly expenses such as rent and bills, while basic living expenses are regularly occurring costs such as food and transportation, and these two categories of expenses (together called “fixed living expenses”) are necessary to maintain life.

The higher the share of total expenditures represented by fixed living expenses, the report concludes, the lower the quality of life. Preferential spending refers to spending on things that increase satisfaction without being immediately necessary, such as cigarettes, alcohol and entertainment, while relational spending is spending that contributes to happy relationships, such as the cost of attending meetings or making donations. Since both of these types of expenditures (“optional spending” for short) are related to happiness, quality of life goes up in proportion to their share of total expenditures.

The report found that young people in occupational cohorts with higher income and more stability tend to have a higher expenditure-based quality of life. Among all the occupational cohorts, the average absolute amount of fixed living expenses was the highest, at 788,000 won (US$735), among regular workers. But the occupational groups in which fixed living expenses accounted for the highest share of expenditures were those with less stability, including part-time workers (59.3%), freelancers (57.6%) and contract workers (56.3%).

Not having enough money to cover basic living expenses undermines people’s daily life as well. Han juggles part-time jobs and her job search, and the reason she can’t devote herself entirely to her job search is because she has trouble covering her living expenses. “It’s almost impossible to look for a job while getting by on 600,000 won a month. I’m always anxious that I’ll be stuck with my current lifestyle. I’ve been getting treatment for insomnia for three years because of the stress about money issues and looking for a job,” Han says.

Occupational cohorts are ranked for optional spending (a category in which quality of life tends to increases along with spending) as follows: regular workers (464,000 won; US$430), contract workers (382,000 won; US$360), part-time workers (359,000 won; US$330) and job seekers (335,000 won; US$310). Lower employment stability and income is correlated with a higher share of fixed lifestyle spending and a lower absolute value of optional spending, implying less satisfaction with one’s spending and a lower quality of life.

“In the case of part-time workers and low-wage workers, once they have paid their fixed costs, including housing, food and transportation, they often have to get by on a deficit, let alone putting money aside. If this period of living on a deficit is prolonged, it inevitably means these young people will be exposed to debt,” said Ha Jun-tae, chief of strategy for the Seoul Youth Activity Support Center.

The reason Kim So-yun thinks her quality of life is poor is because her wages (1.24 million won after taxes) are low in absolute terms. On Dec. 22 of last year, Kim plunked down 65,000 won (US$61) to purchase name-brand cosmetics at a department store. “This was the first time in my life to buy name-brand makeup at a department store. It was really great to feel like I was treating myself. I realized that this is what it’s like to make money,” she said.

In December, Kim spent 867,000 won (US$810) on her fixed living expenses, including 300,000 (US$280) on housing, while she spent 385,000 ($358) won on optional expenses. Her fixed living expenses were 170,000 higher than the average (696,000 won; US$650), while her optional expenses were slightly lower than the average (389,000 won; US$365). “I wish I could make about 2 million won (US$1900) a month. Then I bet I would be happy and could even save money, too,” she said.

Expenditures vary considerably depending on residential type

Expenditure-based quality of life also varies considerably depending on residential type. When monthly spending patterns are divided according to residential type (living with parents, cramped boarding houses known as gosiwon, communal living arrangements, monthly rent with a deposit, key money rental, personal ownership and dormitory), the residential cohort with the lowest quality of life was the gosiwon.

For the gosiwon cohort, fixed living expenses were found to account for 69.0% of total expenditures. For people who live with their parents, on the other hand, fixed living expenses represented 47.2% of total expenditures, which was lower than average (53.8%), while optional expenses were higher than average, at 35.3%. This suggests that members of the so-called kangaroo tribe, or young people who live with their parents, have higher quality of life.

Choi So-won (28, not her real name), who works for a non-profit organization in Seoul, is an example of an involuntary member of the kangaroo tribe. As a regular worker, Choi makes 1.5 million won (US$1400) a month before taxes, but she spent 2.08 million won (US$1940) in Dec. 2017. “Sure, I’d love to move out. But since I don’t have any extra money, that desire to move out just becomes an indulgence I can’t afford,” she said.

For young people, housing places them in a precarious financial situation where the slightest change puts them in the red. Kim Seo-hui, 30, who works as an analyst at a private-sector research institution, lived on her own in Seoul for 10 years after entering university but moved to a rental apartment in Seongnam, Gyeonggi Province, in Oct. 2017. “While I was studying at university, I would maintain as many as five private lessons at one time to cover my rent and living expenses. I made as much as 1.7 million won a month (US$1,590), but that left me poor grades and no personal time,” Kim said.

The rent in her current apartment and other bills add up to about 400,000 won (US$373) a month. While this is no small amount for Kim, who makes 1.8 million won (US$1,680) a month after taxes, she says she still feels more satisfied than when she was living in Seoul. “It would be great to put down key money on an apartment, but that’s too much to ask for [since I haven’t saved any money]. It would be nice to save even 400,000 won a month, and I wish I could make about 2.4 million won (US$2,240) a month.

“There is a causal relationship between the quality of employment and housing and the quality of spending, and when the quality of employment and housing decrease, the quality of life decreases as well,” the report said.

“In the youth transitional period, only regular workers with stable employment and young people who do not have to worry about housing are able to establish themselves in society. In short, Korean society expects young people to either live with their parents or force their parents to make huge financial sacrifices on their behalf.”　
　
By Hwang Keum-bi and Choi Min-young, staff reporters

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