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Half of Young Workers Are in Debt

By Yang Mo-deum | December 18, 2017 08:28

The prosperity gap is widening in Korea as elsewhere around the globe, according to a survey by Shinhan Bank of 20,000 customers across the nation.

The education gap starts at a young age between kids living north and south of the Han River in Seoul.

Parents in the three affluent districts of Gangnam spend W220,000 on average a month on private crammers, compared to W120,000 for children living north of the river (US$1=W1,090).

The spending gap narrows to 1.2 to 1.3 times among elementary and middle school students, but rises to 1.7 times in high school. Average monthly spending on private crammers for each high school student in Gangnam stood at W860,000 compared to just W540,000 north of the river.

The gap carries on into young adulthood, with nearly half or 47 percent of all young novice workers in debt.

Among the indebted young workers, 21 percent took out loans to pay for university, eight percent housing loans, eight percent credit loans and another eight percent borrowed money to pay the rent. Their average debt load stands at a whopping W29.59 million, and they spend W610,000 a month on average servicing it. It would take more than four years to pay off all of their debts.

For many women, returning to work after having children resulted in low-paying jobs. The average monthly wage of women who returned to the workforce after having kids is only W1.8 million. But women who continue to work earn W2.74 million.

Women who had left the workforce for five to seven years make just W1.43 million compared to W2.45 million for women who quit their jobs for less than a year.

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