Social Inequality in South Korea
- KBFC
- Nov 3, 2023
- 5 min read
by Simon Holin
After the war came to an end on the Korean peninsula in 1953, South Korea was among the poorest nations in the world. With a GDP per capita of 67$ and an average life expectancy of just 42 years, life for the average Korean citizen back then was incomparable to what it is today. During a period of rapid economic growth in the 20th century, driven mainly by a few successful exporting companies known as the Chaebol, millions were lifted out of poverty. However, the unfortunate byproduct of this Korean capitalist success story has been rampant social inequality as economic development hasn’t benefited everyone to the same degree. The vast wealth and income gaps that exist in modern Korea have long been critiqued by Korea’s film industry, and with the 2019 Academy award-winning movie Parasite and the viral 2021 show Squid Game, the South Korean story of social inequality has reached an unprecedented, international audience. After tracking down the roots of social inequality in South Korea, the following article will explain why South Korea has been so successful at critiquing its own hyper-capitalist system and offer suggestions on how its government may try to counter inequality.
Roots of social inequality in South Korea
First of all, the term ‘social inequality’ should be clarified. Commonly, the term social inequality describes an uneven distribution of economic resources; whereas ‘social mobility’ describes the amount and the quality of opportunities that exist for people to move up the social latter. Social inequality can occur in relation to a multitude of factors such as race, gender, age, or education. All these factors play a role in facilitating economic inequality. In Korea, education and age are particularly influential when it comes to inequality. Education is so important because obtaining a university degree is seen as a key stepping stone to improving one’s socioeconomic status, and ultimately, to obtain a high paying job. It’s no surprise that Korea consistently ranks among the top of OECD countries for the highest levels of tertiary education. However, this also means that people who do not (or cannot) obtain higher education are seriously disadvantaged and often forced to work in lower-paying service sector jobs.
Age similarly contributes to social inequality. While one would expect older people to be economically advantaged, simply because they have had more time to gain qualifications, work experience, or accumulate wealth, this is often not the case. In fact, Korea has the highest relative poverty rate among elderly people in all the OECD countries with almost half of elderly people living in relative poverty. Elderly people who can no longer participate in the competitive market economy, who receive low pensions, and who have little to no savings because of rising housing prices or expensive medical bills, have no alternative than to rely on their children or grandchildren to provide for them financially.
Why Korean Critiques of Capitalism have been so Successful
While social inequality is high among many of the countries that experienced a rapid rise in the 20th century, with Parasite and Squid Game, Korean pop culture has been particularly successful at critiquing the excesses of the capitalist system which it benefited from so much. Mainly, this has to do with the authenticity of the critique, which is drawn both from history and from many Koreans’ lived experience. After the Asian financial crisis of 1998, which caused a 6,5% dip in Korean GDP, many Koreans no longer had the means to buy houses and had to resort to living in tiny apartments or semi-basements called ‘Banjiha.’ Exactly these conditions are showcased in ‘Parasite’ where a family of three generations lives together in a Banjiha while working for an upper-class family in various service jobs. Nevertheless, their low price makes them attractive to people who struggle to find affordable accommodation in Seoul, a city that has witnessed stagnating wages amidst soring housing prices in the past five years, with the price of an average apartment now sitting at 1m $. Sadly, this has meant that lower-income people were affected the most by heavy floods in recent years, which will become even more common due to intensifying climate conditions.
Photo: J ENM CORPORATION, BARUNSON E&A ALL RIGHTS RESERVED
Korean critiques of capitalism have also gained traction because of the growing popularity of Korean culture, the availability of data and a free media landscape, which makes social inequality plain to see for everyone. Squid game for one captured the attention of so many not just because of its brutality, but also because of its characters’ high relatability and the way it reflected on contemporary social inequality. It showcased immense differences between the poor participants who are willing to risk everything including their own lives, and the mega rich VIPs who perceive the participants’ struggle as a spectacle for entertainment in their otherwise dull lives. In this way, the show mirrored the immense wealth and income inequality of the real world and explored different ways people cope with this reality.
What South Korea can do to lower its Social Inequality
This article has already touched upon some of the important trends in contemporary South Korea: Firstly, the centrality of higher education and a long military service have pushed back the average age of marriage, which has led to declining birthrates. This in turn means that in the coming years South Korea’s population will undergo a large demographic change and older people will make up a much higher percentage of the population, putting a massive burden on young people to provide adequate pensions. The fact that most young people pursue a university degree has made the labour market much more competitive and created large income gaps. From this, it is clear that Korea faces many challenges ahead. However, there are steps that Korea can take to address and prevent the growth of social inequality.
Firstly, the education system needs to be reformed. The state should invest in quality education that prepares young people to not only obtain university degrees, but for different paths as well. If the alternatives such as apprenticeships or entrepreneurship were more common and better supported, young people could pursue a path that better suits them and their abilities. However, this measure should be coupled with a few important labour market reforms. Firstly, the state should expand training programmes for small-business creation since small and medium-sized businesses are essential for job creation. This would give young people an easier time finding their first employment and alleviate some of the pressure they face when entering the job market. Secondly, the minimum wage - which currently sits at 7,8$ - needs to be raised. Considering rising housing and living costs, wages must rise as well. That way elderly people who cannot expose themselves to more competitive, higher-paying jobs and young people who are trying to get initial work experience would have a better social safety net and be able to cover essential living costs.
It remains to be seen how these trends will play out in the future and how they will affect state policy. Will birth rates start to rise again? Will Korea have to further increase its pension age to balance against the rise in welfare spending? One thing that might give hope to an aging Korean population is that communal responsibility and respect for one’s elders is deeply embedded in Korean culture and even the Korean language. On top of that, Korea is not alone with its fate and will be able to learn from the experience and coping strategies of its neighbours China and Japan to address social inequality in the future.
Sources:
https://www.statista.com/statistics/233910/poverty-rates-in-oecd-countries/
https://www.theguardian.com/inequality/2017/aug/02/south-koreas-inequality-paradox-long-life-good-health-and-poverty
https://edition.cnn.com/2022/08/11/asia/seoul-flooding-banjiha-basement-apartment-climate-intl-hnk/index.html#:~:text=The%20deaths%2C%20which%20included%20a,by%20the%20movie%20%E2%80%9CParasite.%E2%80%9D
Picture:
https://www.architecturaldigest.com/story/seoul-government-grant-program-fix-apartments-depicted-parasite
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