S. Korea’s top 10% income share hits 45% of total: research

S. Korea’s top 10% income share hits 45% of total: research

Noh Young-woo, Shin Hyun-gyu


2014.06.01 19:42:50

South Korea’s income inequality is similar to that of the US, according to recent research, which came after the book “Capital in the Twenty-First Century,” written by professor Thomas Piketty at the Paris School of Economics, caused global ramifications.
Korea’s top 10 percent took up 45.51 percent of total income as of 2012, according to professor of economics Kim Nak-nyun at Dongguk University, who released the analysis of the top 10 percent’s income shares in major five countries Sunday as requested by the Maeil Business Newspaper. This is merely two percentage points lower than 48 percent of the US. 
The portion of wealth owned by the top income earners is rising in Korea like in the US. The top 10 percent’s income share has been on an upward track in 15 years under President Kim Dae-jung, Roh Moo-hyun and Lee Myung-bak. The top 10 percent’s income share climbed from 30 between 1979 and 1995 to over 35 percent in 2000 to 42 percent in 2006. In Japan and UK, the concentration of income in the top 10 percent is falling, but the US and Korea saw their ratios consistently go up since 2000.
The causes behind such inequality in distribution include the sluggish economic growth and contraction in employment. “The income inequality was not serious when Korea, Japan and the US were growing rapidly, as the average incomes rose in all groups,” said professor Kim. “Slower growth could be a reason for deteriorating wealth distribution.” In other words, a vicious cycle is at fault, where slower growth further deepens income inequality, which in turn hurts consumption sentiment and leads to sluggish growth

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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