[Opinion] Generational Shocks Caused by COVID-19

Professor Seoyonggu, Department of Business Administration, Sookmyung Women's University

The novel coronavirus infection (COVID-19) situation is gradually approaching the end of a long tunnel as vaccinations have recently begun. Humanity has experienced significant lifestyle changes after being forced to stay home for over a year. For example, the delivery food and home interior sectors are enjoying historic booms. As time spent indoors increases, the home entertainment business is also growing into a massive industry.

Let us examine the negative impact of COVID-19 on happiness in two categories: "emotional well-being" and "financial well-being." Emotional well-being refers to subjective happiness, while financial well-being means the satisfaction of having enough money for oneself and family to live comfortably.

First, in terms of emotional well-being, the generation most severely affected is the baby boomers and elderly aged 60 and above. Mortality rates among those with underlying conditions and the elderly are overwhelmingly high. Their fear of infection slows down social activities. The elderly, who are vulnerable to e-commerce transactions like Coupang and using kiosks such as McDonald's, have strong resistance to forced digital acceleration. Retirement from active work among those born in the 1950s is also accelerating.

Digital acceleration is also a source of stress for Generation X (born 1965?1979). Currently aged 42 to 56, they are supporting their families and playing central roles in society. Additionally, they act as interpreters and bridges between the analog senior generation and the digital junior generation.

The Millennial generation (born 1980?1994) does not fear digital technology but faces increasing anxiety about the future due to job shortages, leading to continuous delays in marriage and childbirth. Their consumption power is the strongest among all generations, but their disposable income is the lowest. This situation inevitably increases dissatisfaction with society. Generation Z (born 1995?2009) criticizes baby boomers as the people who ruined the planet and is most sensitive to social inequality and the climate crisis.

Second, in terms of financial well-being, the group most severely impacted is the Millennials working in face-to-face service industries. Without sufficient savings or real estate assets, they may harbor resentment toward the world due to corporate layoffs and sluggish self-employment markets. This is also the background for "Young Kkul" (borrowing heavily to invest) and the "Donghak Ant Movement" (retail investors rally). For those born in 1974, there was a case during the IMF economic crisis when Korean companies suspended public recruitment for one year, delaying their entry into society by a year. Such delays in social entry or early retirement significantly reduce lifetime earnings.

A study on the British population predicted shockingly that those whose social entry was delayed by one year due to the 2008 crisis would earn about 10% less in lifetime income compared to those who entered the workforce a year earlier. In a trend of continuously declining Gross Domestic Product (GDP) growth rates, even a one-year delay in economic activity has a surprisingly large impact on financial well-being.

In other words, COVID-19 has turned on a red light for the well-being of people worldwide. Tailored policies are urgently needed: for the senior generation most affected emotionally, policies that reduce medical expenses; and for the Millennials most affected financially, policies that alleviate anxiety and boldly provide incentives for home ownership and marriage.