The income gap between the top 10% and bottom 10% of households has surpassed 200 million won for the first time. The asset gap between these groups has widened to over 1.5 billion won. As polarization deepens year by year, discussions on related policies have been sidelined due to President Yoon Suk-yeol's declaration of a state of emergency.
According to the National Statistical Office's household finance and welfare survey and the National Statistical Portal (KOSIS) on the 5th, the annual average income of the top 10% (decile) of households last year was recorded at 210.51 million won. This marks a 6.6% increase from the previous year (197.47 million won), making it the first time since statistics began in 2017 that it has exceeded 200 million won. The surge in property income led this income growth.
On the other hand, the annual average income of the bottom 10% (first decile) was 10.19 million won. Although it was a 6.8% increase compared to the previous year, it was insufficient to narrow the income gap.
The income gap between the top and bottom 10% stands at 200.32 million won, marking its highest level since 2017, exceeding 200 million won for the first time. As large corporations continue their 'performance bonuses feast', the wage gap between large and small enterprises is widening, compounded by the increased interest and dividends income of high earners.
The income gap has led to 'asset' polarization. Last year, the assets of the top 10% of earners reached 1.62895 billion won, which is over 1.5 billion won more than the bottom 10% (128.03 million won).
Earlier, President Yoon declared 'overcoming income and educational polarization' as a major national task during the second half of his term on Nov. 11, garnering expectations. However, just about three weeks later, on Dec. 3, he declared a state of emergency, pushing discussions on policies to resolve polarization to the backburner amid political turmoil following the passage of an impeachment motion in the National Assembly and ongoing impeachment trials.
As political and social conflicts deepen in the aftermath of the impeachment politics, concerns grow that the domestic market is freezing, and the incomes of self-employed individuals and small businesses remain stagnant. Moreover, as political uncertainty increases, corporations are likely to reduce investments, which will inevitably lead to a decline in earned income. In this context, there are calls for policy authorities to continue discussions on solutions to polarization.
Hong Beom-kyo, former deputy director of the Korea Institute of Tax Policy, noted in a report published last year on related topics that 'mitigating polarization is not a challenge that can be achieved in one go.' He advised the need to create a social consensus through political compromise and to design various and specific systems, including appropriate progressive taxation and alleviating the excessive concentration of capital in finance.