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Young Koreans born between 1980 and 1995, called “Gen MZ” to refer to both millennials and Generation Z, earned a little more but faced bigger debt in 2018 than people at the same age in 2000, the Bank of Korea said in a report.
In 2018, Gen MZ -- aged between 23 and 38 -- earned 1.4 times more than what was earned by the same-age peers in 2000. But debts were 4.3 times greater in 2018 than 2000 among people who were identified as Gen MZ at the time.
Meanwhile, “Gen X and B” (Generation X and baby boomers) -- born between 1955 and 1979 and aged between 39 and 63 -- earned in 2018 at least 1.5 times more than their same-age peers 18 years ago. The debts were 2.4 times and 1.8 times higher, respectively for Gen X and B, in 2018 than in 2000.
The report said the gap in debt levels between Gen MZ and the older generations like Gen X and B meant young Koreans today borrowed more from banks and that mortgage loans accounted for most of the debts.
“Gen MZ make up the key demographic leading economic activity, but they are more vulnerable (to a broader economic shock), because of the high debts,” the report said, describing the trend as “alarming” for Asia’s fourth-largest economy.
The report noted that the government should continue monitoring spending patterns of Gen MZ to assess their impact to the economy and put in measures to help them spend less than they earn.
By Choi Si-young (
siyoungchoi@heraldcorp.com)
