Commuters cross a street in Jongno District, central Seoul, on the morning of Oct. 1.YONHAP
A 30-year-old office worker surnamed Kim earns about 3 million won ($2,260) a month, but the paycheck barely lingers in the account. Rent and maintenance fees take nearly 1 million won as soon as it lands, followed by student loan repayments and the previous month’s credit card bill.
“I’ve cut back on plans with friends and stay home on weekends, but my account still empties in no time,” Kim said. “My salary just brushes past me, and every month is a crisis.”
Kim is far from alone. Nearly 80 percent of workers’ monthly pay leaves their checking accounts within 10 days of payday, according to an analysis of NH Nonghyup Bank customers released Tuesday.
Workers in their 20s are left with the thinnest cushion. Six in 10 of them had 1 million won or less in their accounts 10 days after being paid, signaling the tight finances of young people who earn relatively little but face high costs such as student loan repayments and housing.
The bank analyzed customers who received after-tax payments of 1 million won or more in their Nonghyup checking accounts in the first half of this year. One day after payday, 57 percent of the pay remained. That fell to 35 percent after five days, 22 percent after 10 days and 3 percent after a month.
Not all of the drop reflects spending, since some of the money was moved to other accounts for savings or investment. But balances fell notably faster among younger account holders. For workers in their 20s, account balances fell to 75 percent of the payday amount after one day, 57 percent after 10 days and 48 percent after a month. Those 60 and older still had 76 percent after a month, indicating that older workers keep more spare cash in their checking accounts.
At 62 percent, workers in their 20s were the most likely of any age group to have 1 million won or less in their accounts 10 days after payday. The figure was 53 percent for those in their 30s, 47 percent for those in their 40s and 28 percent for those 60 and older.
The median monthly pay for workers in their 20s was 3 million won, 1.7 million won less than the 4.7 million won for those in their 50s. Their average everyday checking balance was 750,000 won, about one-fifth of the 3.6 million won held by those 60 and older.
Pay gaps widen with age, however. Among workers in their 20s, 40.3 percent earned between 2 million and 3 million won a month and 35.4 percent between 3 million and 4 million won, together accounting for 75.7 percent. In contrast, 30.2 percent of workers in their 50s earned 6 million won or more while 26.3 percent earned less than 3 million won, showing that the group has a sizeable number of both high and low earners.
Labor income and debt statistics point to the same squeeze on young people. Labor income for worker households headed by someone 39 or younger fell 0.3 percent on year in the second quarter, the second consecutive quarterly decline, according to data released in August by the Ministry of Data and Statistics. It was the only age group to see a drop. Labor income rose 1.6 percent for households headed by people in their 40s, 2.9 percent for those in their 50s and 2.4 percent for those 60 and older.
The debt burden is also heavy. Of about 4.1 million borrowers aged 19 to 34 at the end of 2024, 58.9 percent held two or more loans, according to a report released this month by the Korea Institute for Health and Social Affairs. Four in 10 borrowers in their 20s, or 39 percent, had student loans. Among young borrowers overall, 41.9 percent held credit loans, 29.3 percent student loans and 18.8 percent jeonse loans (loans for lump-sum housing deposits), showing a significant burden from living and housing-related debt. The share of young borrowers who were 90 days or more delinquent rose from 1.8 percent at the end of 2020 to 2.3 percent in June last year, the biggest increase of any age group.
“Young people carry heavy burdens from student loan repayments and housing costs such as monthly rent, and they also spend a lot on self-development and social activities, so their salaries are quickly used up amid rising prices,” said Kim Dae-jong, a professor in the Department of Business Administration at Sejong University. “Along with expanding quality jobs, policy support is needed to ease the burden of fixed expenses on young people.”
Low pay leaves young workers with little room to build savings, another expert said. “Young people have low incomes, so a large share of their salary goes to living expenses, and they have relatively little room to put money into savings or investments,” said Kim Sang-bong, a professor in the Department of Economics at Hansung University.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
