Analysis of the Economic Pain Index of Korea Economic Daily
27.2, the highest since 2015
The perceived unemployment rate in the first half of this year is 25.4%
2.5%p higher than before Corona
The economic pain experienced by young people aged 15-29 years old amid worsening economic conditions and difficulties in finding employment due to the prolonged COVID-19 outbreak was the worst ever recorded, a survey result showed.
According to the results of the calculation of the perceived economic pain index by generation in the first half of this year, announced by the Korea Economic Research Institute (Hankyungyeon) under the Federation of Korean Industries on the 14th, the economic pain index for the youth was 27.2, the highest since the count in 2015.
The economic distress index is an index that measures the quality of economic life by adding the inflation rate and the unemployment rate at a specific point in time. The perceived economic pain index by generation is calculated by adding the inflation rate by age group to the perceived unemployment rate by age group. The emotional economic distress index of other age groups also recorded the highest level in the first half of this year, followed by those in their 60s (18.8), 50s (14.0), 30s (13.6), and 40s (11.5). The ‘cold employment wave’, which has worsened since Corona 19, was cited as the main cause.
The youth unemployment rate was 25.4% as of the first half of this year, 2.2 times that of those in their 30s (11.7%) and 2.6 times that of those in their 40s (9.8%). The youth unemployment rate rose from 22.9% in 2019 to 25.4% in the first half of 2021, a 2.5 percentage point increase in two years and six months. The rising inflation has also added to the economic pain of the youth. The youth inflation rate remained at 0% after 1.6% in 2018 and rose to 1.8% in the first half of 2021. Although more young people are turning their eyes to starting a business, the situation is not easy for young self-employed people. The rate of closure of individual entrepreneurs under the age of 29 was 20.1% as of 2020, 1.6 times the overall average (12.3%). The closure rate of young individual entrepreneurs rose 0.3 percentage points from 5 years ago (19.8% in 2015), making it the only deterioration among all age groups. During the same period, the closure rates for all other age groups decreased.
An increase in youth debt and worsened financial soundness are also factors that aggravate the economic pain. The debt-to-asset ratio of young people (heads of households under the age of 29) was 32.5% as of 2020, the highest among all age groups. The youth debt ratio was 16.8% in 2015, one of the lowest following ’60 years and older’ (13.4%), but it continued to rise from 2017 (24.2%) and reached the highest level.