Bolder measures needed to offer more decent jobs
The gap in household income widened further in the fourth quarter of last year because of the slumping economy amid the third wave of the COVID-19 pandemic here. According to Statistics Korea, the earned monthly income of the bottom 20 percent of households plunged 13.2 percent to 596,000 won ($536), while that of the top 20 percent grew 1.8 percent to 7.21 million won. This indicates the “upper class” kept decent jobs even amid the pandemic, but the “lower class” comprised of non-permanent workers and day laborers was hit very hard.
The household income report demonstrated that the coronavirus has further worsened income polarization. For instance, the country's distribution ratio for disposable income, a yardstick for earnings equality, reached 4.72 in the fourth quarter, compared with 4.64 a year earlier. After taking away the effect of the government grants, the income quintile share ratio was 7.82 times, up sharply from 6.89 a year earlier. Had it not been for the public sector's role, including the administration's provision of disaster relief funds, the gulf might have been much wider. What the report tells us is clear ― the government should spend more to provide decent jobs to ease the gap.
The number of employed people plummeted by 982,000 in January, throwing the country into its worst job predicament since the Asian financial crisis of 1998. The policy of providing short-term public jobs has had, and will have, a limited effect. Policymakers should expand their fourth aid package to replenish job security support funds. Eventually, however, it should be the private sector that provides stable jobs; while the public sector primes the pump for creating jobs in renewable energy and other sustainable industries.
Korea's consolidated budget balance was minus 4.18 percent of its gross domestic product to rank fourth among OECD member nations last year. The nation went up four notches from eighth place in 2019 despite the release of disaster relief funds on three occasions. That shows the financial authorities can afford to spend more, or have failed to play a positive role. If the government loses an opportunity to inject money and lets the income gap widen further, it may end up failing to restore social stability.