[KS] How unequal is South Korea, really?

Afostercarter at aol.com Afostercarter at aol.com
Sun Aug 20 07:31:53 EDT 2006

Dear colleagues,

A large question, which has been bugging me for some time:
How unequal is South Korea, really?

There is a paradox:

* In the development literature, South Korea (and Taiwan) are
routinely cited as examples of highly egalitarian societies:
a fact often linked to their early and thorough land reforms.

* Yet that is not at all how most South Koreans themselves see it.
In Seoul, inequality and "polarization" are major worries, across 
the political spectrum. President Roh has made reducing inequality
one of the two top goals for the remainder of his presidency 
(the other being to achieve a  free trade agreement with the US).

Who is right? Can these views be reconciled? A few thoughts:

1. There are many kinds of inequality. This debate seems not to be
about eg gender inequality, which remains manifest and pervasive.

2. What about regional inequality? Despite Seoul as vortex and the
Honam-Yongnam divide, the alleged rationale for moving the capital
seemed quite unconvincing. In this respect, South Korea looks quite 
homogeneous when compared to many (most?) other countries.

3. Similarly, the visible income inequalities of a Brazil, China, India, et 
are surely far more extreme and pressing. At least to an outsider, among 
all the socio-economic challenges which South Korea currently faces, 
income inequality is hardly the first that would spring to mind.

Why then do Koreans see it differently? A few hypotheses:

4. One should distiguish income (flow) from wealth (stock).
The latter, as everywhere, is liable to be more unequal.

5. Income inequality may indeed have worsened since the 1997-98 
financial crisis, as has job insecurity. Is S. Korea measurably less 
equal than it was, or does it just feel that way? And in either case,
has it become less equal compared to other countries?

6. Polemically, my instinct is to file all this as yet another case where
current South Korean debates tend to be subjective and inward-looking;
with a real risk that pursuing chimeras may produce misguided policies.

7. However, the clipping below suggests there may be something in
these plaints after all - although note SERI's view that, ironically, the Roh 

administration has made matters worse by (to paraphrase) focusing on how 
to slice the cake, rather than getting on with baking a bigger and better 

8. I bet North Korea is far more unequal than the South, had we the figures.

Enlightenment, please!

best wishes

Honorary Senior Research Fellow in Sociology & Modern Korea, Leeds University 

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South Korea's Income Gap Wider Than in Developed Countries
By Lee Hyo-sik
Staff Reporter
The income gap between the rich and poor in South Korea has deepened over the 
years, becoming wider than in most developed countries, including the United 
Kingdom and Japan.

According to a report by the Samsung Economic Research Institute (SERI) 
Thursday, the Esteban & Ray (ER) index, which measures income inequality between 
income brackets, was 0.0665 for Korea in 2004, higher than that of most 
developed nations. The higher the index becomes, the wider the income gap is between 
the haves and the have-nots.

France's ER index came at 0.0434, followed by Germany with 0.0474, Japan with 
0.0507 and Britain with 0.0653. The United States was the only developed 
country with a wider income disparity than South Korea with an ER index was 
0.0833, the report said.

Also, the National Statistical Office (NSO) reported yesterday that the 
bottom 20 percent in income suffered deficits in the first half of the year as they 
spent more than they earned to cover rising living costs.

The monthly income of the bottom 20 percent of households in the country 
stood at about 800,000 won ($840) during the first six months of the year. But 
they spent an average of 1.2 million per month, resulting in a deficit of 400,000 
won, up 10 percent from 360,000 won recorded in the same period last year.

However, the top 20 percent in income recorded a surplus of 1.9 million won 
per month in the first half, up 4.9 percent from 1.8 million won last year.

The institute attributed Korea's growing income gap between the rich and the 
poor to low economic growth since the 1997-1998 Asian financial crisis and the 
current administration's focus on redistribution of wealth rather than 
economic expansion. [emphasis added]

``Even though the country's exports have expanded at a double-digit figure 
over the past 10 years thanks to rising overseas demand, such an increase has 
failed to encourage companies to expand corporate investment and create 
high-paying jobs,'' it said.

The institute said that is because Korea's exports have become more centered 
on capital and technology-intensive industries, such as semiconductors and 
cellular phones, creating fewer jobs compared to traditional manufacturing 

``To ease deepening economic polarization, the country should make the utmost 
effort to enlarge its economic pie and create more jobs, increasing the 
number of middle-class households, which have lately fallen into the low-income 
bracket,'' it stressed.

The institute also said the government should encourage companies to expand 
facility and research-related investment and phase out discriminative 
activities against non-regular workers to produce high-quality jobs and stabilize the 
livelihoods of low-income households. 

leehs at koreatimes.co.kr  08-17-2006 17:48  
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