As the rich ascend, the rest languish

Homeless people stand in a long queue to get free meals provided by charity groups near Seoul Station. [JoongAng Ilbo]

Last Sunday morning, some 300 people without homes queued up to receive a free hot meal, served by a local church.

“The number of homeless have increased recently, more than during the Asian financial crisis in 1998,” said Choi Sung-won, a pastor who has handed out free meals for 15 years.

Just a few miles away at Lotte Department Store, another long line was forming, but those gathered were waiting their turn to enter the Louis Vuitton store to get their hands on luxury goods.

“On the weekends, when shoppers flock to the store, it takes about an hour for the last person in line to the store,” a clerk said.

Luxury goods consumption in the country has increased 12 percent annually since 2006, according to a report by McKinsey & Company. The number of homeless who come for Choi’s free meals, meanwhile, has risen from 250 to over 300 in the past decade.

The contrasting scenes, just a couple miles apart, are demonstrative of an increasingly polarized country that has, in turn, given rise to various tumults in society in recent months.

The divisions are not limited to income but are leaching into all sectors of society. Most notably, the increasing polarization has begun reshaping the country’s politics.

“Amid the economic downturn, more and more people think the reason behind increasing poverty is because their politicians are incompetent,” said Shin Yul, a political science professor at Myongji University.

Frustrated by what they see as an unjust perpetuation of inequality, disillusioned by the seemingly uphill battle they must climb while so many others seem to have it so easy, many in Korea have found a voice through protests or rejecting whatever status quo they can find.

Shrinking middle class

Shin said that much of the polarization stems from the country’s shrinking middle class.

“A shrinking middle class, which tends to be politically neutral, is exacerbating Korea’s political polarization,” Shin said.

According to Statistics Korea, the nation’s middle class is shrinking each year. The middle class made up 75.4 percent of the entire population in 1990, but the figure dropped to 67.5 percent in 2010.

Instead, low- and high-income classes have expanded. Households in the bottom 20 percent of the income bracket made up 7.1 percent in 1990 but 12.5 percent in 2010. The top 20 percent, meanwhile, grew from 17.5 percent to 20.0 percent in the same period.

The gap in average monthly income has also grown. In June 2011, the top 20 percent of households earned about 7.1 million won ($5,991) per month — 1.8 million won more than in 2003. In the same period, the bottom 20 percent’s monthly income increased by only 290,000 won, from 868,000 won to 1.15 million won.

Polarized and not giving in

The increasing political polarization came to a head in two recent headline-making controversies: the aftermath of layoffs at Hanjin Heavy Industries and the firestorm over Seoul’s free school lunch program.

Liberal lawmakers took part in a series of large-scale rallies dubbed “Bus for Hope,” drawing some 10,000 demonstrators protesting the layoffs, despite criticism from conservatives that liberals were politicizing the issue.

The drama of Seoul’s referendum on its free school lunch program was about more than a local government’s welfare policy. As former Mayor Oh Se-hoon declared war on “reckless populism,” his opponents called for an outright boycott on the referendum. A policy debate, in other words, devolved into a standoff.

“The political parties don’t represent moderates,” said Chae Jin-weon, a political science professor at Humanitas College of Kyunghee University.

“They stick to the old dichotomy between two ideologies, right or left, to attract stable supporters.”

“If they want to fulfill democracy, they should represent the largest number of politically moderate people, not the extreme ends of the spectrum,” Chae added.

An Aug. 27 poll conducted by the East Asia Institute showed the public’s fatigue with politics. Asking 800 respondents which party they thought won the lunch referendum, 70 percent said that no party had won. More than 70 percent also said that they thought the referendum was a political fight and not a debate on policy.

“Politicians should focus on coming up with a practical policy to improve citizens’ livelihood, rather than fighting an ideological battle,” Chae said. “Abandoning old-fashioned ideological battles, they should represent the political middle.”

Polarized labor

The country’s polarization is also a result of its two-tier labor market. According to the OECD’s Social Policy Brochure for Korea, which was released in June, the biggest problems were unfair job opportunities and working conditions between regular and nonregular workers as well as gender discrimination.

“Temporary employment accounts for 21.3 percent of total employment in Korea, the fourth-highest incidence in the OECD area,” the report said.
“The average wage of nonregular workers is 45 percent below that of regular workers, while their productivity is only 22 percent lower.”

The report continued, “The gender wage gap, the largest in the OECD area at 38 percent, may discourage women from entering the labor force.
Moreover, one-third of women hold temporary work contracts, and only 8 percent have supervisory responsibilities.”

According to Statistics Korea, the average monthly wage of nonregular workers in 2010 was about 1.25 million won, half of regular workers’ 2.29 million won.

“In Korea’s labor market, there are two polarized working groups: male regular workers at a conglomerate and female nonregular workers at a small or midsize company,” said Lee Byonghoon, a sociology professor at Chung-Ang University. “Even though they are doing almost similar work, there is a huge gap between them that can’t be overcome.”

“Those in the latter group have a really difficult time getting into the former group because small and midsize companies rarely provide education for them to upgrade their competitiveness, such as various training programs that conglomerates offer their employees,” Lee said.

Lee Keun, an economics professor at Seoul National University, also said that investing in human capital was important in solving the problem of temporary workers.

“The government is just trying to create more jobs to solve unemployment, but it is just a short-term solution,” the economics professor said.
“In a globalized labor market, bluecollar workers will lose their competitiveness and people from developing countries will take the positions. In this sense, Koreans have to boost their competitiveness to get more professional, high-skilled jobs with great projected growth.”

In their 20s and hopeless

Among the most disaffected in the country are youth. With high youth unemployment, rising housing prices and high tuition fees, college students are, in some ways, suffering their own financial crisis.

In a country where 98 percent of people between 25 and 34 have a high school diploma — the highest rate among OECD countries — the pressure to go to college and get a job at a conglomerate can be overwhelming.

A string of deaths of college students who suffered from significant tuition debts sparked large rallies that resulted in the government’s decision to cut tuition by an average of 5 percent for all students.

“Before graduation, university students have about 30 or 40 million won in debt,” said Woo Suk-hoon, a visiting sociology professor at Sungkonghoe University. “To pay back the debt, they need to get a job at a conglomerate in Seoul. Those living in Seoul away from their parents also have to pay high rents, which makes it difficult to save money for marriage.”

“In short, Koreans in their 20s aren’t polarized by income,” Woo said. “They are in standardized poverty.”

By Kim Hee-jin [heejin@joongang.co.kr]