[EDITORIALS]Income gap anxiety

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[EDITORIALS]Income gap anxiety

Korea's income gap is growing increasingly wider, and that concerns us. In any society, an intensifying conflict between the rich and the poor will inevitably cause social unrest and lead to a lower growth potential. So active actions are necessary to address the issue.

According to the result of a recent survey by the National Statistical Office on domestic households' consumption trends in 2000, households in the top 20 percent income brackets earned 6.75 times as much as those in the bottom 20 percent, compared with 4.74 times in 1996. The Gini coefficient, which is used to guage income inequality, was 0.351 in 2000, higher than the figure five years before. Of course, the wider income gap can be attributable, in large part, to the financial crisis that hit the nation in 1997. A chain of corporate bankruptcies and the subsequent increase in unemployment in the aftermath of the economic fiasco took a huge toll on the low-income brackets. In contrast, high interest rates and rising property prices swelled the wealth of the high-income earners, aggravating the distribution of income.

A widening income disparity will cause social conflict and will likely disturb economic stability. The problem is that households in the middle 60 percent income brackets, which are viewed as the middle class, also saw their share of the total household income declining, signaling a weakened foundation for the middle class. Moreover, the rapidly growing digital divide and the spread of performance-based salary systems will likely widen the income disparity further. The unequal distribution of wealth that has been seen in the world's most advanced economies since the 1980s is also likely to take root in Korea.

In order to reduce the income gap, the government should put a priority on creating jobs and improving the employment structure, while individuals' efforts are also important. The government should implement major deregulations and support corporate activities as well as seek ways to increase human capital by, for instance, providing job training designed to fit the information society.
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