I am sure that the trend exhibited here is not just evident in South Korea. However, South Korea is often thought of as doing very well and hence people think that there will be less poverty. The gap between rich and poor is also growing in the US.
Poverty nearly doubled in the last decade
Economic disparities rise to record high as the rich get richer
With the middle class fast deteriorating, the nation`s poor population has nearly doubled in a decade to 2006, the Korea Institute for Health and Social Affairs said yesterday.
The state-run think tank said the "poor" class, defined as those earning less than half of the average national income, accounted for over 20 percent of the total population last year, up almost 9 percentage points from 1996.
The middle class tumbled to 43.7 percent last year from 55.54 percent a decade ago, indicating that about a quarter of middle class households were financially crippled over the decade.
But the "rich" class, defined as those earning over 50 percent or more than the average national income, jumped to 25 percent from 20 percent, according to the KIHASA.
The diverging data reflects Korea`s growing income gap between haves and have-nots.
The income gap between rich and poor households widened to a record level last year, the National Statistical Office said.
The top 20 percent of Korean households earned 7.64 times more than the bottom 20 percent, far above the earning gap in major European economies and Japan.
The Gini index, a barometer of income inequality, also rose to a record high of 0.351 for 2006, the NSO noted.
The KIHASA data showed the economic disparities are also hurting the population`s health.
Only 22 percent of the bottom 10 percent of the population was found to be healthy in a 2005 survey, down from 35 percent in 1998.
Park Jong-kyu, a research fellow with the Korea Institute of Finance, called on the poor households to cut down expenses to curb the growing deficits.
He pointed out that Korea`s bottom 10 percent earners had spent 50 percent more than their income in recent years, far above Japan`s lower class, who spends around 80 percent of their income.
"We should consider whether the poor class overly relied on debt rather than tightening spending," Park said in a report.
"It is important to create jobs through spurring growth and to restore the middle class to help the poor people recover from chronic deficits."
By Ko Kyoung-tae