Lies, more lies, and statistics
The author is a columnist at the JoongAng Ilbo.
I could hardly believe my ears when President Moon Jae-in earlier this week said the economy was moving in the “right direction.” Employment and income conditions have “noticeably improved in both quantity and quality,” he added. He cited the job data for August and second-quarter household income statistics. He cannot be serious, or he has been misinformed.
Last year, the president even replaced the chief of Statistics Korea with a new face as he was not pleased with the income numbers. The government continued fiddling with numbers. Earlier this month, the Ministry of Strategy and Finance presented a three-page press release on middle-class income. On the first page, it noted that the size of the middle class — a group whose income is 50 percent to 150 percent of the median income — shrank. The share of the group in the total population decreased to 58.3 percent. The ratio was 66.2 percent in late 2016 before the launch of the Moon Jae-in administration in May 2017. The ministry attributed the decline in our middle class to our “structural problems” — such as the fast-aging population and increased single-person households.
On the following page, the ministry highlighted an improvement in income distribution by citing the Gini coefficient — a barometer for income or wealth distribution. The Gini index — which ranges from 0 to 1 — improved to 0.305 in the second quarter from 0.317 in the first quarter (the smaller the number, the more equal distribution of income). But the index left out single-person households. When including them, the Gini coefficient for the second quarter is 0.326, a much worse figure than the 0.305 presented by the ministry.
Compared with 0.298 in the second quarter of 2016 under the former administration, the index actually worsened to 0.304 in 2017 and 0.326 in 2018 under Moon.
The Finance Ministry said the Gini coefficient data was its own, not the one formally compiled by Statistics Korea. The statistics office, which does not release quarterly Gini coefficient data, claims that it has not been asked by the Finance Ministry. The office instead releases household income quintiles for each quarter. The higher the number from dividing the top 20 percent income bracket by the bottom 20 percent, the worse income inequality. In the second quarter, the gap was 5.30 times, the widest ever.
The Gini coefficient released once a year by Statistic Korea actually worsened compared to that of the past administration, and yet the ministry apparently hid or fabricated the fact to allow the president to gloat over the income data.
Then why has the president suddenly turned optimistic about the economy? First, he could have naively believed the reports from government offices or chose to close his own ears and eyes. Second, he was seeing and hearing what he wished to see and hear. Third, he could have been fed rosy words by the finance minister, ruling party chief and senior presidential secretary on economic affairs. Fourth, he may have been hungry for positive news on the economic front. Finally, he may have needed moral support for his leftist ideological front.
The president is known to be a careful reader, so he could not have missed it. The public has come to know how stubborn and narrow-minded the president can be, as clearly seen in his obsession with Cho Kuk, the controversial new justice minister. There are concerns from overseas about the Korean economy. Some say the government’s leftist policies are doing more harm to the economy than family-run chaebols. The government has been controlling prices, relying on tax spending for its populist policies, and blocking competitions. The people are beginning to worry if the president is not just out of touch but plain oblivious.
JoongAng Ilbo, Sept. 19, Page 30