Fried chicken joints vs. the airportThere are so many restaurants and diners dotting the streets - offering fried chicken, rice rolls, pizza and pork bellies - in Seoul. The owners may change frequently, but they almost always stick with the same business. The commercial spaces in apartment complexes or streets in residential areas are filled with small restaurants, often managed by retired baby boomers, who get loans or invest their retirement funds. With few options for their second career, they resort to the restaurant business, and usually experience failure and end up with debt rather than becoming successful restaurant owners. Recently, the Wall Street Journal cited the fried chicken joints as an example of the darker side of the Korean economy, highlighted by the saturated small businesses, swollen household debts and lack of social welfare.
On the same day, Korean media featured a very different story about Incheon International Airport. During the Chuseok holiday, 320,000 people are going abroad, and flights are sold out. The articles urged travelers to arrive at the airport early. In other words, a considerable part of Koreans can afford a trip abroad for the holiday.
The struggling chicken joints and the crowded airport don’t seem to go well together. The juxtaposition illustrates the serious polarization of income. Those who are well-off are spending money while financially struggling people have no money to spend. So the domestic consumption is not reviving, and companies aren’t investing in the domestic market. For economic growth, we need extensive spending by the general public rather than overflowing savings by the rich.
The chicken joints and the airport symbolically show the pressing issues of the Korean economy. When a crisis comes, the weak will fall first, and the strong will survive. The few who endured the economic slump would swallow those who fell behind to become even richer. We have gone through this painful cycle after the foreign currency crisis.
The polarization is the result of the crises we have experienced as well as the cause of future crises. Korea is not alone. In his Sept. 12 column in the New York Times, U.S. economist Paul Krugman wrote that the latest economic comeback in America is a “rich man’s recovery” and argued that the extreme inequality is poisoning the society.
Of course, some always have counterarguments for such concerns. They claim that we cannot correct the inequality of the outcome as long as equal opportunities are provided. They have a point, but the reality is harsh. The equal opportunity of yesterday leads to inequality of outcome today, which again leads to unequal opportunities tomorrow. More children of the rich get into prestigious universities and have a greater chance of finding high-paying jobs upon graduation.
We need to tackle the inequality not just for the happiness of the people but to maintain the market. Keeping “equal opportunity” as a mantra will not solve the problem.
By now, critics will make arguments on a different level. Do we want to prioritize distribution over growth? Shouldn’t we make a bigger pie first and then share it? However, a pie is gone once you eat it, but that’s not how the economy works. The economy grows permanently and dynamically as growth and distribution influence each other. Yi Guk-yueng, a professor of international politics at Sungkyunkwan University, wrote in his book, “Depression,” that comparing the economy to a pie is a bad analogy. If we must use the pie analogy, we’d better say that a pie, big or small, should be baked for every meal to grow and cut slices fairly to distribute.
On the latest economic development, Deputy Prime Minister for Economic Affairs Hyun Oh-seok said, “Considering the current recovery satisfying enough is a passive attitude of focusing on defense and hoping the game to end after scoring a goal first.”
He emphasized that in football, we need to score another goal to secure victory. He is right. However, no one has seen him scoring a goal. If he wants to get recognition for his goal, a fried chicken joint owner should be able to close the shop for a few days and take a vacation for the holiday. Then, no audience would jeer that the players are focusing on defense.
*The author is an editorial writer of the JoongAng Ilbo.
By Nahm Yoon-ho