Korea Needs to Wake Up to the Problem of Poverty

As of last year, a total of 3.058 million households lived in poverty in Korea, exceeding the 3 million mark for the first time. That accounts for 18.1 percent of the total 1,692 households in Korea. In 2009 alone, 134,725 more households fell into poverty, mainly due to the loss of 72,000 jobs caused by the recession.

If all households in Korea are arranged according to income levels, those making less than 50 percent of the middle level are classified as poor, while those making 50 to 150 percent are categorized as middle class. Households that make more than 150 percent of the median wage are classified as high-income.

The number of poor people in Korea is getting larger every year, from 16.7 percent of the population in 2006 to 17.4 percent in 2007 and 17.5 percent in 2008. The ratio of households classified as poor based on disposable incomes, including government welfare payments, accounts for 15 percent of the population, which is much higher than the OECD average of 12 percent.

The proportion of middle class families also shrank from 60.8 percent in 2006 to 58.7 percent last year. The middle class is being dismantled and declining into the ranks of the poor. One of the defining characteristics of the Korean economy recently is the lack of job creation despite economic growth, because the areas of the economy creating the highest growth are in manufacturing, which relies on automated production lines, rather than the labor-intensive service industries.

The reason why Korea has been able to evolve as a democratic society and its economy has not fallen victim to internal disputes is because of the large number of middle class households that has grown steadily during the 1970s to 90s, and they have acted as a shock absorber of sorts. In the same light, the decline of the middle class and the rise in the ranks of the poor signify that Korea's foundations of democracy and a free market economy are being shaken.

Under such circumstances, it becomes meaningless to try to explain to others that the basic principle of a free market economy is not the egalitarian distribution but equal opportunities for everyone. If equal opportunity is just a slogan, it ends up creating inequality of opportunity and threatens the very foundations of equality, and with it the roots of democracy.

In an analysis of crime, the Supreme Public Prosecutor's Office said the poor accounted for 43.9 percent of crimes, while the middle class accounted for 21.4 percent and the upper class only 0.6 percent. Children from poor families accounted for 62 percent of all juvenile delinquents. That is why the problem of poverty must be dealt with from a social perspective rather than from an economic standpoint. The educational gap between the rich and poor is the reason why social inequality is passed down from one generation to another. A society that cannot protect its poor citizens will in the end be unable to protect its wealthy citizens either. Korea needs to wake up to the problem and look at the root causes of social inequality.