How to divide the peopleThe government and the ruling Democratic Party (DP)’s decision to give relief grants to the lower 80 percent income brackets stirs controversy again. Koreans are questioning what are the grounds for dividing the people into the lower 80 percent and upper 20 percent. Their disgruntlement is reasonable. For instance, according to guidelines set by the administration, if a person belongs to the lower 80 percent income bracket yet owns an apartment worth more than 2 billion won ($1.77 million) or has a financial income of more than 20 million won a year, he or she is not eligible for the grants.
But there are many who are struggling to live due to a lack of earned income even though they have modest financial income. Given all the complicated variables involved, it is not easy to set agreeable standards needed to determine the lower 80 percent income group.
Such confusion was expected after the ruling front rushed to dole out the grants based on political reasons ahead of the next presidential election in March. After the outbreak of the coronavirus in February 2020, the Ministry of Strategy and Finance planned to hand out its first relief grants to the lower 50 percent income group three months later. But after the DP strongly opposed the plan, the ministry stepped back and expanded the scope of recipients to the lower 70 percent. But even that proposal was rejected by the DP at the time, which led to a universal payout of the grants for the first time. Money for all was the only acceptable proposal.
The Ministry of Finance and welfare experts recommend the government hand out the money to the lower 50 percent or 70 percent income group. Narrowing the scope and offering the grants to the needy is more effective to help them. Research by a government-run think tank also showed that the universal grants last year achieved only 30 percent of what they were intended to. That reconfirms the efficacy of the principle of selection and concentration.
Despite such precedents, the DP has fueled confusion by resorting to dividing the people into the upper 20 percent and lower 80 percent this time. Such arbitrary standards only help the people get confused over whether they are entitled to receive the grants — particularly when their incomes are bordering the 80 percent ceiling. Some of them will be happy to get the benefits while others will certainly complain that they are excluded from the recipient groups — and ask why. What is the answer to that question?
When political calculations dominate economic policy, it only triggers social conflict. We hope the government presents reasonable standards for the grants before it’s too late.
How to divide the people