Gap between the rich and poor

In 2005, the term "bipolarization" became a popular political buzzword in Korea. In his New Year`s speech, then President Roh Moo-hyun said, "Bipolarization is at the heart of Korea`s economic problems," proposing co-growth as a remedy. The global economy was booming at the time, but rather than focusing on the economy, Korea adhered to reform including settling unresolved past issues. This resulted in Korea`s GDP hovering below the world growth average. In 2006, President Roh said, "The biggest threat to Korean society is bipolarization." Many criticized him then for using political manipulation techniques to urge Koreans to unify behind him via class warfare.

Since then, Koreans have been forced to believe that their country is one of the most polarized states in the world. When President Lee Myung-bak took office, opposition parties criticized him for widening the gap between the rich and poor by naming wealthy figures to Cabinet positions and promoting tax cuts for the rich. In response, the government launched a series of welfare policies including halving apartment prices and college tuition and offering free education, measures long demanded by the progressive Democratic Labor Party. Last year, Korea`s Gini coefficient was 0.31 (17th in the world), the same as the average of the Organization for Economic Cooperation and Development. Rival countries responded by saying talking about the Gini coefficient given the situation was absurd.

The OECD, the so-called club of rich countries, said Monday that the gap between the rich and poor has reached its highest level in OECD member countries in 30 years. In 2008, the average income of the richest 10 percent of the Korean population was about nine times that of the poorest 10 percent, the OECD said. Korea, Japan and Italy had a similar ratio. The earnings multiple for Germany, Denmark and Sweden, the three countries famous for equality, was 6:1. The figure for the U.S. and Israel was 14:1. Both Chile and Mexico had 25:1 and emerging market economies like Brazil 50:1.

A proverb says compare yourself with people below you to become truly happy and compare yourself with people above you to be better off. If people were to live in a society with no gap, they might not be happy and fail to grow. People cannot choose their parents, but can climb to higher levels with effort and ability. This is a fair society. To achieve a fair society, the government should give low-income people education and training opportunities to catch up changing technology trends. Simply forcing the affluent to pay higher taxes without offering quality education is no good.

Editorial Writer Kim Sun-deok (yuri@donga.com)