Korea's Middle Class Keeps Shrinking
The middle class has been shrinking over the last 20 years while the ranks of the poor have swelled. Won Jong-wook of the Korea Institute for Health and Social Affairs said in a report on Monday that the middle class accounted for 74.47 percent of Korean society in 1990 but had shrunk to 67.33 percent by 2010, down 7.14 percentage points in two decades.
In contrast, the low-income bracket, which accounted for 7.34 percent in 1990, had grown to 12.24 percent by 2010, up 4.9 percentage points.
Researchers at the institute analyzed the change in the proportion of middle-class households in urban areas based on data provided by Statistics Korea. They defined the middle class as people earning between 50 to 150 percent of the median income, and low-income earners as those who make less than 50 percent.
The median income rose from W920,000 (US$1=W1,055) in 1990 to W1.79 million in 2010.
Looking at age groups in different wage brackets, those in their 30s accounted for 39.32 percent of low-income earners in 1990, falling to 15.91 percent by 2010.
In contrast, those in their 60s or above accounted for 40.57 percent of low-income households in 2010, up from just 7.95 percent in 1990, demonstrating the effects of the aging society.
Those in their 60s also accounted for 13.51 percent of the lower middle-income bracket in 2010, up from just 2.14 percent in 1990.
"A surge in high-wage earners over the last 20 years spearheaded the rise in the median wage, but struggling owners of small stores and other businesses did not see their income rise and ended up falling into the low-income bracket," Won said.
He added an increase in the number of people in their 60s or above who work part-time or in low-paying jobs to make ends meet in retirement led to the rise in their proportion of the low-income bracket.