The top 10 percent income brackets in South Korea took up 50.6 percent of the total income in the nation as of 2017, according to a recent report on the ratio of the highest income released by the Korea Labor Institute (KLI).
The institute analyzed 41.82 million of a population aged over 20 as of 2017 based on the annual report of national taxes. This is the analysis result of the nation’s total income of 80.40 trillion won (US$70.97 billion), including labor income, such as wage, bonus and stock option, business income and financial income, including dividend and interest.
The report said that the figure is among the highest proportion among advanced capitalist countries in 2017. The proportion of top 10 percent income bracket in the nation showed a steady growth in the 2000s and recorded 40.71 percent in 2004 for the first time, surpassing the 40 percent level. The figure rose to 49.1 percent in 2014 in a decade, 49.65 percent in 2015 and 49.79 percent in 2016. Then, it increased 0.81 percent points again in 2017, exceeding 50 percent.
The report said that the increase in the proportion of the top income bracket was led by the top 1 percent. The proportion of the top 1 percent income bracket stood at 10.42 percent in 2004 and then continued to grow 4.84 percent points to 15.26 percent in 2017, surpassing the 15 percent level. The income boundary value of the top 1 percent came to 135.71 million won (US$119,811), which was more than 2.5 times higher than 51.53 million won (US$45,493) of that of the top 10 percent. There was also a clear polarization even in the top income bracket.
Hong Min-ki, a senior researcher at the Korea Labor Institute said in the report, “Wage income inequality had led the growth in the proportion of top 1 percent income bracket before the 2010s but financial income, like dividend, and business income have been widening inequality after the 2010s.
There is a growing gap between the haves and the have-nots because the middle class, which prop up the economy, has crumbled. More than 50 percent to less than 150 percent of median earnings and more than 150 percent of median earnings saw their proportions decrease 0.4 percent point and 0.1 percent point, respectively, according to the data on the income of wage earners by job in 2017 from the Statistics Korea. On the other hand, less than 50 percent of median earnings, which was categorized as the poor strata, stood at 20.8 percent, up 0.5 percent point from a year earlier. In a nutshell, South Korea’s poverty rate has expanded while the middle class has dwindled.