There are debates on the argument that recent economic inequality created a ‘crisis’ of the middle class around the world. The size and the economic influence of the middle-income households have decreased, comparing to those of the high-income group, in many OECD countries. However, we also found that the economic realities of middle-income group vary by country. In Japan, for example, the evidences show that the proportion of the middle-income group has not decreased in recent years.
This article examines the recent changes in dynamics of middle-income group of South Korea. The questions are as follows: Is the Korean middle-income group going through crisis as many OECD countries present, or does it show a stable trend as Japan does? What’s the main issue in the economic inequality pertaining to the middle-income group in Korea?
Using the measure suggested by OECD of 2019, we define the ‘75-200% group of the national median equivalized disposable income’ as middle-income group. We also divide middle-income group into three categories (Lower, Mid and Higher Sector of the group) and look into its internal differentiation. By examining the distribution of income and wealth of the middle-income group separately during the 2010s, we conclude that the economic vulnerability of the middle-income group is evident in wealth rather than income. The steep rise in housing prices widened the wealth gap between home-owners and non-owners, which has led to an internal differentiation among the middle-income group.
Sungkyun Lee received a doctorate degree in Sociology at the University of Wisconsin-Madison in 1997, and currently works as a professor at the University of Ulsan, Korea. He was also a visiting scholar at the Industrial and Labor Relation School, Cornell University, in 2015. His main research area is the analysis of labor market and economic inequality, and a new book Inequality and Poverty Issues in Korea will be published in the Fall of 2022 in Korea.