A Study on the Diagnosis of Korean Social Polarization and Response to Social Policy

Abstract

This study analyzed the impact that polarization can have on society by grasping the polarization phenomenon cross-sectionally and longitudinally. Polarization means economic polarization, that is, polarization of income in a narrow concept, but polarization as a whole including income polarization in a broad concept (confrontation of political values between social groups due to disparities between groups in the economy and society as a whole, differentiation of lifestyles, relative increased sense of deprivation, etc.). In terms of income polarization, the polarization of market income has recently been intensifying, but has tended to be alleviated in terms of disposable income through public intervention. The market income gap still exists. Since 2017, the Gini coefficient of wealth has increased in both total and net assets. 1.7% of households living in the metropolitan area and 0.3% of households living in non-metropolitan areas were in the top 1% in net worth. When expanded to the top 5%, 7.8% of households residing in the metropolitan area and 2.3% of households residing in non-metropolitan areas belonged to it. As for the wage level of college graduates compared to middle school graduates (skilled workers versus unskilled workers), the difference in nominal amount between the wages of middle school graduates and below and the wages of college graduates and above has widened since 1980 at workplaces with 10 or more employees. The wage gap between regular and non-regular workers is widening, and the number of non-regular workers continues to increase. Nearly 90% of regular workers are enrolled in the national pension, while the participation rate of non-regular workers is only about 38%. The proportion of the elderly in the first quintile with low income reaches the mid-50% and is gradually increasing. Income mobility in the market is also not high for the elderly. There is not much room for improvement in the poverty of the elderly amidst the aging phenomenon in the future, so it is expected that the phenomenon of deepening and polarization of the elderly poverty will also appear. The two implications of this study were that the gap is progressing further in addition to the polarization phenomenon, and that the gap that occurs in the market is greatly reduced after the government intervention. In order to resolve the polarization, the principle of equal work and equal pay, and inequality and discriminatory matters must be corrected so that minorities and the socially vulnerable can participate in the labor market and society. Childcare and childrearing support policies that increase women's participation in economic activities and reduce the childcare burden of working women should be strengthened. Alternatives to narrowing the wage and welfare gap between conglomerates and SMEs must be presented. Finally, it is necessary to prepare policies to resolve the polarization and gap that will occur in the future society. Adjust the national pension insurance premium as a measure to strengthen the social safety net, but the income replacement rate should also be strengthened to improve the elderly poverty rate. To narrow the income and wealth gap, the progressivity of income and assets must be strengthened. A multi-layered social safety net that considers the life cycle and life process should be established.