ID :
86182
Mon, 10/26/2009 - 07:23
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https://www.oananews.org//node/86182
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(EDITORIAL from the Korea Times on Oct. 26)
dailies-editorials (2)
(EDITORIAL from the Korea Times on Oct. 26)
Widening income gap: Time to take action to adopt more welfare programs
It is frustrating to realize that the rich become richer while the poor get
poorer. Especially, since the income gap has widened even further amid the
unprecedented global economic crisis. This phenomenon has deepened partly because
of the government's inability to create jobs and the massive tax cuts which only
benefit the wealthy. More disappointing is that it will be harder to bridge the
disparity because the Lee Myung-bak administration has little policy options to
ensure the redistribution of wealth.
According to a report by the Korea Institute of Public Finance (KIPF), the
proportion of households earning less than half the median family income reached
8.5 percent last year, the highest level since 1998 when the rate surged to 14.8
percent following the Asian financial crisis. It is worth noting that the poverty
rate of households headed by people in their 20s and those aged over 60 reached
20.6 percent and 20.3 percent, respectively. This indicates that 20-somethings
have increasingly emerged as the poor class due to the higher jobless rate. And
more senior citizens are relying on state support.
Another distinguishing feature is that less educated people have become poorer
than those with higher education. About 48 percent of households headed by those
without any formal education were found to be in abject poverty, while 23.7
percent of families supported by those with only elementary school education
earned less than half of the average income. However, households headed by
university graduates showed a poverty rate of only 2.9 percent. This proves that
Korean society has failed to guarantee equal opportunities for everyone
regardless of educational background.
Gender inequality is also evident as women are more likely to suffer financial
hardship than men. The report said 17 percent of households led by women were
poor, while male-supported families showed a much lower poverty rate of 6.6
percent. More worrisome is that the nation's Gini coefficient, a key index on
income disparity between the rich and the poor, rose to its highest level of
0.317. The KIPF's analysis sends a clear message that policymakers have failed to
take proper measures to narrow the wealth gap. Instead, they have focused on tax
cuts which they claimed would have trickle-down effects to help not only the rich
but also the poor by stimulating investment and consumption.
But in reality, the government policy proved to have helped fatten only rich
people's wallets because they are more easily able to accumulate wealth. Against
this backdrop, the Lee administration has recently pledged to take a
people-friendly policy as well as promote social integration. However, it is
doubtful that such a policy can produce substantial results in reversing the
income gap trend. Most of all, the government should overhaul its welfare policy
to better protect the poor. Its policy focus must be on how to balance economic
growth and the redistribution of wealth.
It is also urgent to strengthen the social safety net and implement more welfare
programs to help the lower-income brackets get out of poverty. Besides, the
government and businesses should work together to create more jobs to speed up
economic recovery and iron out the income disparity. Failing to do so will only
result in a loss of hope, distrust of the government and social conflicts in
Korea.
(END)
(EDITORIAL from the Korea Times on Oct. 26)
Widening income gap: Time to take action to adopt more welfare programs
It is frustrating to realize that the rich become richer while the poor get
poorer. Especially, since the income gap has widened even further amid the
unprecedented global economic crisis. This phenomenon has deepened partly because
of the government's inability to create jobs and the massive tax cuts which only
benefit the wealthy. More disappointing is that it will be harder to bridge the
disparity because the Lee Myung-bak administration has little policy options to
ensure the redistribution of wealth.
According to a report by the Korea Institute of Public Finance (KIPF), the
proportion of households earning less than half the median family income reached
8.5 percent last year, the highest level since 1998 when the rate surged to 14.8
percent following the Asian financial crisis. It is worth noting that the poverty
rate of households headed by people in their 20s and those aged over 60 reached
20.6 percent and 20.3 percent, respectively. This indicates that 20-somethings
have increasingly emerged as the poor class due to the higher jobless rate. And
more senior citizens are relying on state support.
Another distinguishing feature is that less educated people have become poorer
than those with higher education. About 48 percent of households headed by those
without any formal education were found to be in abject poverty, while 23.7
percent of families supported by those with only elementary school education
earned less than half of the average income. However, households headed by
university graduates showed a poverty rate of only 2.9 percent. This proves that
Korean society has failed to guarantee equal opportunities for everyone
regardless of educational background.
Gender inequality is also evident as women are more likely to suffer financial
hardship than men. The report said 17 percent of households led by women were
poor, while male-supported families showed a much lower poverty rate of 6.6
percent. More worrisome is that the nation's Gini coefficient, a key index on
income disparity between the rich and the poor, rose to its highest level of
0.317. The KIPF's analysis sends a clear message that policymakers have failed to
take proper measures to narrow the wealth gap. Instead, they have focused on tax
cuts which they claimed would have trickle-down effects to help not only the rich
but also the poor by stimulating investment and consumption.
But in reality, the government policy proved to have helped fatten only rich
people's wallets because they are more easily able to accumulate wealth. Against
this backdrop, the Lee administration has recently pledged to take a
people-friendly policy as well as promote social integration. However, it is
doubtful that such a policy can produce substantial results in reversing the
income gap trend. Most of all, the government should overhaul its welfare policy
to better protect the poor. Its policy focus must be on how to balance economic
growth and the redistribution of wealth.
It is also urgent to strengthen the social safety net and implement more welfare
programs to help the lower-income brackets get out of poverty. Besides, the
government and businesses should work together to create more jobs to speed up
economic recovery and iron out the income disparity. Failing to do so will only
result in a loss of hope, distrust of the government and social conflicts in
Korea.
(END)
