Vietnamese laborers in South Korea tighten belts amid high inflation

By Le Tuyet   June 5, 2024 | 03:07 pm PT
Having instant noodles for breakfast, cutting vegetables from daily meals, and limiting remittances are what Vietnamese laborers in South Korea have been doing to cope with rising prices and the depreciation of the won against the dollar.

"A week ago, I ate vegetables three times per week, but now I only do so once. I don't dare to buy fruit, to save money, but my savings aren't improving," said Nguyen Phuc Thien, 28.

Thien came to South Korea three years ago as a student and then stayed to work.

He is currently working at a factory that manufactures plywood for container flooring, with an average monthly income of about 2.7 million won (US$1,954) per month.

Unlike employees of several companies, Thien takes care of his own accommodation and daily meals, so he clearly feels a strong impact when prices rise.

"Only the rent is stable, everything else has increased by at least 30% compared to the end of 2022," Thien said.

He said that previously, he could buy two or three carrots and potatoes for 2,500 won, now they cost 3,500 won, while the price of a bunch of spinach has jumped from 1,200 to 3,000 won.

If he keeps the habit of going to the market as before, his food expenses will increase two to threefold.

Among all goods, agricultural produce, especially fruit, has increased the most.

Even though it is now the watermelon harvesting season, which means supply is abundant and prices would go down, he has not dared to buy any.

His friends have also tightened their budget and they hardly go out for entertainment or dining.

Determined to earn money in South Korea and return to Vietnam to start a business, Thien has always been frugal from the first day.

When prices rise, he tightens his daily expenses even more.

Most of his breakfasts are instant noodles.

Instead of going to the supermarket, he joins groups on social media to buy vegetables grown by other Vietnamese or asks his family in Vietnam to send him homegrown vegetables.

Thien’s work is physically demanding, but now he must minimize food expenses. To stay healthy, he avoids staying up late and goes to bed early. "I’ve worked more and eaten less, but the savings don't increase," he said.

Vietnamese workers work in the agricultural sector in Korea. Photo by Nam Cuong

A Vietnamese guest worker at a farm in South Korea. Photo by Nam Cuong

South Korea is one of the three major markets chosen by Vietnamese workers going abroad, after Japan and Taiwan.

Vietnam and South Korea have had 30 years of cooperation in labor supply and utilization. By last summer, Vietnam had over 49,000 workers in the country, with an average income of US$1,500-2,000 per month.

Last year alone, the country welcomed over 11,600 Vietnamese people to work.

South Korea’s consumer price index rose 3.1% in February from the same month the year before, compared with a rise of 2.8% in January.

On a monthly basis, consumer prices rose 0.5%, after rising 0.4% in the previous month. It was the fastest jump since September, according to Statistics Korea.

Inflation picked up again due to the rising prices of fruits including apples and other fresh products. At the beginning of the year, fruit prices increased by nearly 40% compared to the same period, the sharpest increase in 32 years.

South Korea's consumer inflation accelerated in February and beat expectations due to supply-side pressures after three months of easing, official data showed on Wednesday.

At the same time, the currency of the fourth largest economy in Asia also weakened against the dollar.

By mid to late April, the won had fallen more than 7% against the dollar this year, the sharpest drop since the global financial crisis in 2008.

In this context, Vietnamese guest workers are facing a double impact when having to deal with high prices due to inflation and the reduced value of money sent back to Vietnam.

"When I borrowed money to go to work in South Korea, one won was almost equivalent to VND20, but recently there have been times when it dropped to only 16," said Tran Van Mai, who has been in South Korea as a guest worker for nearly two years.

Mai, 24, works for a food factory, earning about 2.1 million won per month.

Luckier than Thien, Mai stays in the company’s dormitory and has all three meals provided by his employer during the five working days. He only has to take care of his meals on weekends.

Mai said many single people prefer eating out for convenience, but the price of a meal outside has skyrocketed. He gives an example that a bowl of white rice was previously free or cost 500 won, but now the price has jumped by two-three times.

Therefore, he buys food to cook himself to save on expenses on Saturday and Sunday.

Mai cooks for himself in the company dormitory. Photo by An Phuong

Tran Van Mai has a meal at his company's dormitory in South Korea. Photo by An Phuong

Due to the depreciation of the won, Mai limits sending money back to Vietnam, except when his parents need it.

"Now sending one million won is almost like sending two million, not to mention that the cost of exchanging money has also increased," Mai said.

Tran Hong Bien, whose husband is a skilled worker and sponsored her to come to South Korea nearly 10 years ago, said that she has "clearly felt" the high prices due to inflation for the past year.

However, the couple "still manage to get by."

To save money, she buys goods at traditional markets instead of going to the supermarkets. In her area, from 5:30 a.m. to 8:30 a.m. every day, there are small market groups, and a large market session is held every five days. The locals gather their homegrown agricultural products to sell at half the price of the supermarkets.

Bien also uses dried fish sent from family members in Vietnam for their daily meals. She does the same for some types of medication and coffee.

The couple almost never eat out.

Of the money sent back to Vietnam, she only sends a sufficient amount for her parents to take care of her 7-year-old daughter.

"We can still endure this level of inflation, but if it continues to increase, we may have to consider returning to Vietnam," she said.

Nguyen Nhu Tuan, deputy director of the Information – Propaganda unit under the Department of Overseas Labor of the Ministry of Labor, Invalids and Social Affairs, said among the markets chosen by Vietnamese workers, South Korea is considered a country with good wages, benefits, and working environment.

The most popular program is the Employment Permit System (EPS) with visa category E-9 is a system implemented by South Korea to allow workers from certain countries to legally work in South Korea's industries (mostly in the small and medium-sized manufacturing sector) that require manual or unskilled labor.

This system aims to meet the demand for labor in industries where there is a significant shortage of domestic workers willing to engage in such jobs.

At a total cost of US$630, including a deposit of VND100 million that will be returned when the guest labor finishes the contract and returns to Vietnam legally, workers can normally save VND1.5-2 billion after three years of working.

Tuan believes that workers participating in the EPS program usually stay in dormitories and have daily meals provided by the employers, so they are not much affected by inflation.

Additionally, South Korea annually increases the minimum wage to help workers offset some of the increased costs. For example, this year with a 2.5% adjustment, the hourly wage in the country has increased from 9,620 won to 9,860 won while the basic monthly salary increased from 2,010,580 won to 2,060,740 won.

He added that despite certain economic fluctuations, South Korea remained a market chosen by many workers. In the future, the Department of Overseas Labor will continue to monitor and provide necessary support measures for workers when needed.

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