Income Polarization Keeps Growing

      March 09, 2013 08:20

      Income inequality in Korea is getting steadily worse. The numbers of the so-called working poor who earn less than W1 million (US$1=W1,090) a month and of high-wage workers who make more than W5 million a month are both rising rapidly, while the number of median-wage earners stagnates.

      Statistics Korea on Wednesday said the total number of wage earners stood at 17.86 million as of the third quarter of last year, up 4.6 percent on-year. But 2.64 million earned less than W1 million a month, up 6.8 percent, while the number of those who made a lower-median W1 million rose just 1 percent.

      Lee Joon-hyup of the Hyundai Research Institute said, "We need to check if employers who used to pay their staff more than W1 million a month are now paying them less."

      The number of high-wage earners also jumped 14.7 percent to 1.03 million last year, surpassing the 1 million mark for the first time.

      "The proportion of high-wage workers is increasing as wages in big conglomerates rise," Lee said. "You can see a clear polarization where the number of earners at both extremes of the scale rises."

      To achieve greater equality the fat middle of the bell curve, where most people's incomes are located, should be rising, but instead it is being squeezed.

      A spokesman for the Federation of Korean Industries said, "Many companies are only hiring new workers on non-regular contracts because they have a tight budget due to pay raises for established regular staff. This contributed to the worsening polarization."

      More highly educated workers are also earning less. Some 240,000 people with college or higher educational background earn less than W1 million a month, up 5.7 percent on-year and way above the 5 percent increase in the number of highly educated workers overall.

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