South Korea experienced the fastest income polarization among the OECD countries in the past decade. According to the Korea Labor Institute, the degree of income inequality in the country reached 4.74 then, representing the biggest gain among the OECD member countries. This means that the income gap between the rich and the poor in South Korea has been accelerating the most among the OECD countries.
To What Degree Can Income Inequality Exist?
According to the National Tax Service, the top 20% of the income earners in South Korea made an average of 90 million won last year, up 55% from ten years earlier. On the other hand, the bottom 20% saw their income tumble by 54%. The degree of income inequality is determined by dividing the labor income of the upper 10% by that of the bottom 10%. The bigger the figure is, the more serious the income inequality. This finding should serve as an alarm signal to the government on the worsening income polarization in the country.
What Is the Phenomenon of Polarization?
South Korea has become a society where the rich are becoming richer and the poor poorer. The income disparity has reached a dangerous level and poses a threat to the social cohesion and national harmony. The cause of the problem lies in the country's socioeconomic structure based on the high concentration of wealth on a small number of businesses and their owners. South Korea also currently has the highest ratio of low-income workers. An estimated three million South Koreans are living in poverty, and an additional 2.5 million are classified as 'working poor.' As many as eight million people are part-time workers earning only 60% of what full-time employees are making. The middle class, the backbone of a democracy, is continuously shrinking. What this really means is that the middle class will rapidly shrink and crumble if nothing will be done about the income polarization in the South Korean society.
Are There Answers?
South Korea is one of the most dynamic countries in the world and is an example for other countries in many respects, but it needs to make further efforts to boost its productivity and social cohesion. Therefore, it is time for the government to shift from a quantitative growth policy to a qualitative one, to rebuild the country's crumbling middle class, and to help the poor. Moreover, a more stable and solid social welfare system is critical considering the income inequality in the country and the expanding number of the working poor.
The South Korean government must put an end to the increasing social conflicts in the country, and the ruling party should work more closely with the government to come up with solutions to this problem and to pursue greater social cohesion. Moreover, to improve the local labor market, the South Korean government has to strengthen the social insurance system for non-regular workers and to adopt family-friendly policies at work, such as paid parental leave. Of course, the government also has to come up with further plans to help students from poor families. To help those who are forced to give up their studies due to financial difficulties, the government must announce a new state loan plan that will relieve poor students of the burden of repayment until they get a job. Educational opportunities should also be equal so that the students from low-income families could obtain a good education and could sever the chains of poverty that bind them.
Yang Hyun-ah (ST Reporter)
sc7992@ssu.ac.kr
