In search of contentednessSouth Korea’s per capita income based on purchasing power parity (PPP) was measured at $33,200 as of July 2013, according to the World Factbook of the U.S. Central Intelligence Agency. A per capita income based on purchasing power parity better represents the country’s real economic value and living standards as it factors in the currency exchange rates. The countries with higher per capita incomes based on PPP are mostly North Americans, Europeans, oil-rich Middle Easterners or tax haven states. In Asia, Japan, Singapore and Taiwan have higher numbers. Japan’s is at $37,100, the UK $37,300, France $35,700, and European Union average at $34,500. In fact, we aren’t doing that badly. Spain and Italy are lower than us at $30,100 and $29,600, respectively.
From the data alone, South Koreans enjoy the lifestyle of an advanced economy. Considering the revenues of wholesalers, retailers, lodging providers and the restaurant sector are underestimated in national income statistics, South Koreans income per head may be actually a bit better. Anyone who has lived in Europe, the United States or Japan would easily agree that Koreans actually live more comfortably, and possibly more extravagantly.
What does this all mean?
First of all, our economy can no longer run and grow on a model emulating the ways of the Western countries. A growth engine that ran on imported technology coupled with large investments and cheap labor has stopped working. An aging population and declining investments only underscore the downsides of our model. We must create new technologies and redesign the system in order to retool our means of development. The economy will lose steam and slow down if these changes and adaptations are not made quickly. Improved productivity is the key to future growth, but progress has been little or slow. Domestic manufacturers see better productivity in their factories in China than industrial bases at home. China offer labor costs of less than half what you pay in Korea. Korean companies’ manufacturing lines in the United States generate double the output of their counterparts in Korea. Korean companies cannot sustain current wage levels for its domestic employees if their performances remain so poor. Without revolutionizing work methods in the public and private sector, performance reviews, hiring and promotions, we may not be able to maintain our status quo or catch up with other advanced nations. The quality of our education must be raised and labor sector reformed, and corporate restructuring accelerated. The ashes are growing cold. No short-term stimuli will reignite the flame of growth.
Second, our society must be a happier place regardless of how fast it grows economically. We have been obsessed with strong growth figures for the last half a century and still can’t let go of the idea. An economy must grow at a meaningful pace. But our country has neglected and missed too many things in the process. According to comparative data among members of the Organization for Economic Development and Cooperation, South Korea ranks second in working hours, first in death from industrial accidents, first in its suicide rate, 33rd in the national happiness index, and last in its birth rate. In an American poll on a Quality of Life Index, South Korea is 75th among 135 countries. We are behind the Philippines (40th), India (71st), and Iraq (73rd). Why do we lead such unhappy and unfulfilling lives when we obviously earn enough? What the people need is to be happier and more comfortable with what they have. All social customs, practices and systems must be reoriented to that purpose. We must build a society where manners, decency, honesty, transparency, mutual trust, fairness, gravity of law and order and fair competition are valued. Each person should be allowed to fully build and employ his or her individual talents through fairer education and employment opportunities. Anyone must be able to turn to a minimum social security net during times of despair and misfortune. Reason rather than argument must prevail in our society.
The people are hungry for happiness. Our hunger for a better life spurred the miraculous rags-to-riches turn in the economy. The hunger for happiness must be a new driving force. We tend to blame everything on the government. But the government alone cannot bring happiness into our lives. We must devote passion to revamp social customs and culture through various campaigns. The government must encourage and reward this effort through various incentives. This is how a nation is revolutionized. We should stop wasting our resources arguing and relying on short-term stimuli measures provided by a government working. We should instead use what we have to generate more lasting changes - improvements in productivity to make a happier, fairer and more balanced society.
Translation by the Korea JoongAng Daily staff.
JoongAng Ilbo, Sept. 27, Page 31
*The author is an economics professor at Sogang University.
by Cho Yoon-jae