Vietnamese workers in Korea "tighten their belts" due to inflation

"Before, I ate vegetables three times a week, now I only eat once. I don't dare buy fruit to save money, but my savings haven't improved," said Nguyen Phuc Thien, 28, about the days of facing inflation in the land of kimchi.

Three years ago, Thien went to Korea as an international student and then stayed to work. He is currently working at a factory producing container lining boards with an average monthly income of about 2.7 million won, equivalent to 50 million VND. Thien takes care of his own accommodation and food, so he is heavily affected by rising prices.

"Only the rent has not changed, everything else has increased by at least 30% compared to the end of 2022," Thien calculated. He listed the previous time he went to the supermarket to buy 2-3 carrots, potatoes cost 2,500 won, now it costs 3,500 won, spinach went from 1,200 won to 3,000 won... If he kept the same shopping habits as before, the cost of food would increase 2-3 times.

According to Mr. Thien, among all the commodities, Korean agricultural products have increased in price the most, especially fruits. Even when it is watermelon season, he has not dared to buy any. He and his friends hardly go out to have fun or eat.

Thien decided to go to Korea to earn money to return to Vietnam to start a business, so from the very beginning, he always spent frugally. When prices increased, he tightened his spending even more. Most of his breakfasts during the week were instant noodles and eggs. Previously, he ate three meals of vegetables a week, but now he has reduced it to one, sometimes two. Instead of going to the supermarket, he goes to groups of fellow countrymen to buy vegetables grown by Vietnamese people or brought from home to reduce costs.

Carrying heavy loads is hard work but food expenses must be kept to a minimum, so to stay healthy, Thien limits staying up late and goes to bed early. "Working more, eating less but the savings do not increase," Thien describes his current situation.

South Korea is one of the three major markets chosen by Vietnamese workers when going abroad to work, after Japan and Taiwan. Vietnam and South Korea have cooperated in supplying and using labor for 30 years. By the middle of last year, Vietnam had more than 49,000 workers working in the land of kimchi with an average income of 1,500-2,000 USD per month. Last year alone, this country received more than 11,600 people to work.

According to Statistics Korea, the country's inflation rose 3.1% in February and March, after rising 2.8% in January. Inflation rose again due to rising prices of fruits, including apples and other fresh produce. At the beginning of the year, fruit prices increased by nearly 40% compared to the same period last year, the strongest increase in 32 years.

At the same time, the currency of Asia’s fourth-largest economy has weakened against the dollar. By mid-late April, the won had fallen more than 7% against the dollar this year, its steepest decline since the 2008 global financial crisis.

In this context, Vietnamese workers in Korea are almost doubly affected when facing high prices due to inflation and the decrease in the value of remittances to Vietnam.

"When I borrowed money to go, one won was worth nearly 20 Vietnamese dong, but when I went to Korea, there was a time when it was only 16," said Tran Van Mai, 24, who has been in Korea for nearly 2 years. He works for a food factory and earns about 2.1 million won, equivalent to 40 million dong.

Luckier than Phuc Thien, Mr. Mai was arranged by the company to stay in a dormitory and take care of three meals in five working days. He only took care of his own meals on weekends. According to the young man, many single people often eat out for convenience, but the price of a meal out has skyrocketed. For example, a bowl of white rice that used to be free or 500 won is now 2-3 times more... Therefore, he buys food and cooks it himself to save money.

Due to the depreciation of the won, he limits sending money back to Vietnam, unless his parents need it.

"Now sending one million won costs almost two million dong, not to mention the increased money exchange fee," Mai said.

Meanwhile, Ms. Tran Hong Bien, who was sponsored by her husband, a skilled worker, to come to Korea for nearly 10 years, said that in the past year, she has clearly felt the high prices due to inflation. However, she and her husband "still manage". To save money, she buys things at the market instead of going to the supermarket. Where she lives, every day from 5:30 to 8:30 there are small markets, and every 5 days there is a large market. Local people collect agricultural products to sell at half the price of supermarkets.

For savory dishes, Ms. Bien uses dried fish sent from Vietnam. Some medicines and coffee are also sent from relatives in her hometown. The couple hardly eats out. Of the money she sends back home, she only sends enough for her grandparents to raise their 7-year-old daughter.

"My husband and I can still bear this inflation rate, but if it continues to increase, we will have to consider returning to Vietnam," said Ms. Bien.

Mr. Nguyen Nhu Tuan, Deputy Head of Information and Communication Department, Department of Overseas Labor Management (Ministry of Labor, War Invalids and Social Affairs), said that among the markets chosen by Vietnamese workers, Korea is considered a country with good salaries, benefits and working environment. The program that attracts the most workers is the Employment Permit System (EPS - E9 visa) with a total cost of 630 USD, the deposit of 100 million VND will be received back when returning home. Normally, with a working period of nearly 5 years, workers can save 1.5-2 billion VND.

Mr. Tuan said that workers under the EPS program often stay in dormitories and are provided with food and accommodation by the company, so they are not much affected by inflation. In addition, every year, Korea increases the minimum wage to help workers offset some of the increased costs. For example, this year, with a 2.5% adjustment, hourly wages in this country increased from 9,620 won to 9,860 won, and the basic monthly salary also increased from 2,010,580 won to 2,060,740 won, equivalent to 38 million VND. Workers also receive overtime pay and other benefits.

According to Mr. Tuan, the cost of going abroad is low and the income is high, so despite certain fluctuations in the economic situation, Korea is still the market chosen by workers. In the coming time, the Department of Overseas Labor Management will continue to monitor and take measures to support workers when necessary.