S. Korea’s top 10% income share hits 45% of total: research
June 4, 2014 Leave a comment
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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