Less cash, more debt, almost no travel: pandemic survey

Economy

Published: 17 Nov. 2021, 15:42

Less cash, more debt, almost no travel: pandemic survey

People waiting to be tested for Covid-19 in front of a district office in Songpa, Seoul, Wednesday. The number of people infected with the contagious virus has spiked amid the government easing social distancing regulations since the beginning of this month. A binannul survey found that one third of people saw thier income shrink while many have borrowed debt since the pandemic started. [YONHAP]

One third of Korea's households say their incomes shrank in the last year, and many said they took on more debt.

According to a biannual social survey by Statistics Korea released Wednesday, 32.1 percent of respondents said their incomes shrunk compared to a year ago, while 13.1 percent said they increased. The survey was of households with members that are 19 years old or older.

In the previous study in 2019, 22.8 percent of respondents said their incomes had shrunk compared to the previous year while 18.8 percent said they grew.

Some 26.2 percent said their debts increased compared to a year ago. That’s up from 20.4 percent in 2019.

This suggests that households that saw their incomes shrink during the pandemic borrowed more. Low interest rates in the early stage of the Covid-19 pandemic contributed to people borrowing more.

Among people in their 50s, 40 percent said their incomes shrunk compared to a year ago because of the pandemic. Among respondents in their 40s, 35 percent said the same.

Some 35.8 percent of respondents in their 30s and 40s borrowed more in the past year.

People in their 40s and 50s needed the greatest incomes as they generally have children with tuition needs.

The survey found that 59 percent of households consider themselves middle income, while 38.5 percent said they were in the lower income class. Only 2.7 percent said they were rich.

Respondents' outlooks for next year weren’t optimistic.

Only 23.5 percent said their financial situation will likely improve next year. That’s higher than the 2019 survey but only by 0.1 percentage point.

Some 21.4 percent said their financial situation will likely deteriorate next year, a 0.8 percentage point drop from the 2019 survey.

A full 65.7 percent said they will be cutting back on eating out if the situation does not improve in 2022.

Respondents said they were also willing to cut spending on clothing (44.6 percent), groceries (43.5 percent) and culture and leisure activities (36.1 percent).

One of the biggest changes wrought by the pandemic is that more people are putting family ahead of work and friends.

Respondents who said that family comes first accounted for 18.3 percent, a sharp increase from 13.7 percent in 2019.

Some 33.5 percent said work comes first, which is a drop from 42.1 percent in 2019.

“Covid-19 [including social distancing that restricted meetings] has had a negative influence on all relationships outside of the immediate family,” said a Statistics Korea official.

Some 36.7 percent of respondents said their relationships with relatives deteriorated, while 35.5 percent said their relationships with close friends have become less close.

Some 12.6 percent said relationships soured even among immediate family members.

The study found that 16.6 percent of respondents worked from home during the pandemic.

Some 56.8 percent said working from home was efficient whereas 43.2 percent said it wasn't.

Respondents in their 40s were most critical of working from home.

The biggest problems cited were difficulty in processing work (50.2 percent), difficulties in communicating with people at work (16.4 percent), and disturbance from household chores and raising children.

Only 1.1 percent of respondents said they traveled abroad within the last year, a sharp drop from 30.4 percent in 2019.

Only 39.8 percent said they traveled locally, a drop from 69.2 percent in 2019.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]