Ratio of Poor Class in Korea Ranked Second in OECD

An analysis that ranks the rate of income inequality and the intensity of poverty in Korea to be relatively high among the Organization for Economic Cooperation and Development (OECD) countries has been released.

It points out that more job openings should be created in earnest by going through economic prosperity in order to improve this.

A researcher of Korea Development Institute, Yoo Kyung-joon, disclosed on Tuesday that the Gini’s Coefficient of Korea increased from 1996’s 0.298 to 0.358 points in 2000, showing a sheer rise.

Gini’s Coefficient indicates how fairly gross incomes are being distributed. If it is close to zero, it means more equality, and if it is near one, it means inequality.

Although the Gini’s Coefficient of Korea was assessed to be at a middle level among OECD countries back in 1996, it was revaluated in 2000 as third highest after Mexico and the United States among the other OECD countries in a similar period.

“The reason the coefficient increased could be attributed to the skyrocketing numbers of unemployed and the enlarged wage gap caused by laborers’ scholastic abilities,” said Yoo. He added that “based on these reasons, the rate of income inequality might have been aggravated since 2000.”

In addition, the ratio of the poor that do not even reach the forty-percent level of the middle class’s average income increased to 11.53 percent in 2000 from 1996’s 7.65 percent. This rate of increase is the second highest among the OECD countries, following Mexico’s 16.3 percent in 1998.

On the policy recommendation parts, Yoo laid stress on the fact that “if government forces are to reverse the tendency of income inequality and poverty conditions by strengthening the distribution policy, the possibility of side effects that may retard economic recovery cannot be excluded.” He added that “creating more job openings through economic recovery should be the first step to solving the problem. As for the poor who have not adapted themselves to market competition due to their limited working ability, governmental support should be enhanced.”

Chi-Young Shin higgledy@donga.com