In preparation for a BBC television interview (which failed to happen due to Skype Internet difficulties), I looked into the indicators and foundations of current South Korean sentiment. What I discovered was much less sanguine than official Bank of Korea statistics that the news agencies and embassies frequently quote.
addition to the below excellent report from which I can personally
recognize a number of young Koreans who fit the article's descriptions,
please consider findings from Gallop Korea's recent report.
During the second half of each November, Gallop Korea polls some 1500
South Koreans above the age of 19. This past November's results were
largely similar to those of November 2011, polling sentiments about the
coming calendar year.
Here are some of the highlights:
"How do you feel the ROK economy in 2013?" (percentage of replies)
Worse: 40% (previous year's poll had a 'worse' rating of 43%)
Better: 12% (no change from the previous year's poll)
Similar: 46% (previous year's poll 'similar' rating was 43%)
"How will your household fare in 2013?"
"What will happen with unemployment in 2013?"
Of interest is that the first two
questions' results, given the 2.1% margin of error, were statistically
identical for the past two years. If there is any optimism about 2013,
it would be because there is a 6% rise in expectations that unemployment
will decrease versus a 3% drop in those expecting unemployment to
increase. Still, given that half of the population believes
unemployment will rise in 2013, I would caution government workers and
politicians not to cheer too loudly.
Now, contrast the above with today's Reuters news release on the Bank of
Korea's sanguine report that customer sentiment was the strongest in 8
months at 102 versus Decembers 99 score, with 100 representing neutral
feelings. The BOK also projected the coming 12 months to be just 3.2% -
which is entirely in line with fantasies that this government agency
has been broadcasting for the past years.
whoever decides what goes into the economic basket of indicators has
considerable influence on the results. For most South Koreans, more
significant inflation can be seen in the substantial increases of food
prices, utilities (electrical rates alone were hiked 4.9% last August
and will go up another 4.0% this month). And many expect taxi rates to
When it comes to unemployment, the most
important figures are those assigned to young people. While the
national unemployment average is officially recognized as being only
3.0%, only 60.1% of Koreans in their 20's are recognized as
participating in the economy. And, of course, to have a part-time job,
including working at a convenience store with a college degree, means
one is "employed." Even so, at the end of 2012, youth unemployment was
recognized to be only 7.5%.
No one seems to bother,
however, how to reconcile 39.1% of young people being economic
non-participants with just 7.5% unemployment.
As the below article points out, Korea's largest 194 companies this past
year offered 18,950 (down from 20,500 offered the previous year) career
potential, entry-level jobs. Considering that virtually all South
Koreans complete high school and a good 80% graduate from college or
university, it is unsurprisingly that in 2012 a large portion of the
300,000 college graduates competed for those 18,950 jobs.
due to many discouraged job seekers having returned to college to gain
additional degrees, we may expect as many 500,000 graduates out on the
job market as soon as 2015.
As the below article points out, many young Koreans have pretty much
given up on marriage and raising children. It comes as no surprise that
South Korea has one of the lowest birth rates among OECD countries.
While many countries have a traditional pyramid-shaped demographic
profile, South Korea has a distinctly diamond-shaped profile.
allow me to suggest why the consumer price index is as good as it may
be. It could well be that many Koreans in their 20’s and 30’s are
living at home, forsaking marriage without saving for their independent
housing, but making the best out of a dire future by living for today by
consuming more for short-term pleasures to somehow make up for their
Given all of this and much more, the "news" about small, single-digit
improvements in government statistics about CPI, inflation, unemployment
seems divorced from the greater reality that makes up most Koreans'
The real story is much more complicated, but few
international news agencies take the time to dig down and discover what
is actually happening with the majority of South Koreans.
The real story is much more fascinating, if at times grim, suggesting
that Korea could be operating on a two-part economy - that of large
companies and the wealthy as opposed to that of small- and medium-sized
companies and the majority of South Koreans. But that topic must be
reserved for another message.
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