Rising Inequality and Shifting Class Boundaries in South Korea in the Neo-Liberal Era

Abstract

Having maintained a relatively equitable pattern of income distribution throughout the period of rapid economic development, South Korea has experienced a drastic increase of inequality over the past two decades. This article examines Korea’s income distribution pattern and identifies several structural cleavages and mechanisms in the economy that account for the rising inequality and then considers various class structural implications of this change in income distribution. It argues that Korea’s income distribution has become polarised, but that this polarisation is more complex than usually captured by the popular phrase, “the top 1% versus the bottom 99%.” It involves two forms of polarisation: one, occurring in the labour market between regularly employed and non-regularly employed workers, and between employees of large firms and smaller firms; and the other, between a minority of top income earners (the top 1% to 10%) and the rest of the labour force. The consequences of this skewed income distribution include a shrinking middle class, blurring class boundaries, internal divisions within both the middle and the working class, and the rise of a new, affluent middle class.