The share of the middle class in Korea has increased to 60% in the last 10 years. As a result of the increase in government subsidy, the overall income increased. However, it turns out that the school’s expectation of class movement, if you make an effort, you can go to the top class, has decreased somewhat.
On the 31st, Lee Young-wook, head of the Finance and Social Policy Department of the Korea Development Institute (KDI) released a report titled ‘The Current State of the Middle Class in Korea and Policy Tasks’.
The Office for National Statistics usually considers people between 50 and 150 per cent of the median income as the middle class. According to Lee, this proportion increased by 6.2 percentage points from 54.9% in 2011 to 61.1% in 2021 based on disposable income. On the other hand, based on market income, it increased by only 1.7 percentage points from 49.8% to 51.5% over the same period.
Market income is money earned through actual work, such as earned income and business income. Disposable income is the sum of transfer income such as government subsidies. The fact that only the middle class based on disposable income increased significantly while the middle class based on market income did not change significantly shows that government welfare benefits have had an expanding effect’ r middle class over the last 10 years.
However, the belief that it is possible to move to a higher hierarchy seems to be diminishing. According to a social survey carried out by the Office for National Statistics, the percentage of respondents who answered ‘very high’ or ‘relatively high’ to the question ‘Possibility for an individual’s socio-economic status to increase if they make efforts in our society’ fell from 28.8% in 2011 to 25.2% in 2021. it did. The proportion of respondents who said that the socio-economic status of their children’s generation was likely to increase from 41.7% in 2011 to 30.3% in 2021 was reduced.
In a poll conducted by the Korea Economic Daily in 2020, 53.6% of respondents said “it is not possible” to the question, “Can children accumulate wealth through hard work even if their parents are poor ?” In particular, the vested interests, such as the social leaders, were identified as the cause of the unfair structure. 69.7% of the respondents answered that “inequality has increased because the privileged class give their children opportunities.”
Ha Joon-kyung, a professor of economics at Hanyang University, also analyzed that the mobility curve of the then-class peaked in the 1980s and 1990s and then showed a sharp decline.
According to KDI, the range of change in real income has also been reduced. ‘Income mobility’, which measures the degree of change in income after a year, fell from 31.6% in 2016 to 29.6% in 2019. In recent years, wealth inequality has been widening, with a focus on property assets real estate
Director Lee said, “There are concerns about sustainability just by expanding the middle class through government transfer spending, and there is a clear limitation that cannot lead to expectations for upward mobility,” he said.
At the same time, he suggested the need to create quality jobs, encourage the extension of the employment period for middle-aged retired people and the elderly, resolve obstacles to the employment of female spouses, and strengthen support for work-life balance.
Reporter Kang Jin-kyu josep@hankyung.com
.png?fit=300%2C300&ssl=1){kind=spacer}
.jpg?fit=300%2C300&ssl=1){kind=spacer}
.jpg?fit=300%2C300&ssl=1){kind=spacer}
