The Korea Economic Association released a report on the trends in real income, revealing that the growth rate for people in their 20s remained in the 1% range. Despite improvements in simple unemployment rates, worsening job quality, such as the increase in irregular employment and soaring dining costs, are considered the main reasons for this trend.
According to the “2014-2024 Trend Analysis of Real Income by Generation” report published by the Korea Economic Association on the 29th, the real income growth rate for those in their 20s over this period was only 1.9% annually, unlike other generations.
When looking at the average annual real income growth rate by generation, it was 3.1% for those in their 30s, 2.1% for those in their 40s, 2.2% for those in their 50s, and 5.2% for those aged 60 and above. The 20s were the only age group with a growth rate in the 1% range. The real income growth trend for those in their 20s also declined from an annual average of 2.6% in 2014-2019 to 1.1% in 2019-2024.
Worsening job quality has been identified as a factor hindering income improvement for those in their 20s. This age group has a relatively higher proportion of labor income in nominal income compared to other generations. Over the past decade, the annual average growth rate of labor income for them was recorded at 3.6%, which was the lowest among all generations.
During the same period, the proportion of irregular employment for those in their 20s increased by 11.1 percentage points (p), and though the unemployment rate decreased from 9.0% to 5.8%, only quantitative improvement was achieved without qualitative progress.
Furthermore, the rise in perceived inflation due to soaring dining costs also affected the real income of those in their 20s. Although the growth rate of disposable income for those in their 20s improved from an annual average of 3.8% in the past five years (2014-2019) to 4.0% in the recent five years (2019-2024), the perceived inflation rate jumped from 1.1% to 2.8%, resulting in a lower real income growth rate. This is because food and lodging, the largest expenditure categories for this age group, have risen steeply.
The Korea Economic Association suggested that for income improvement in people in their 20s, enhancing the quality of labor market policies alongside stabilizing dining prices is necessary. As of 2022, Korea’s total labor market policy expenditure as a percentage of real GDP is 1.02%, which exceeds the OECD average of 0.98%. However, there are limitations due to the overemphasis on quantitative improvements, such as direct job creation. They also mentioned the need for tariff quotas and efficiency in agricultural product distribution to ease the cost burden of ingredients in the dining industry.
A representative from the Korea Economic Association stated, “It is necessary to diversify labor market policies to improve job quality, such as employment training and the potential of companies to create quality jobs,” adding, “Stabilizing dining prices by reducing the cost of ingredients should be carried out concurrently.”