Re: Korean inequality - but perhaps not so yet.

Re David Smith's post of the article in Korea Times:

Let us get this in perspective.  Korea's Distributional Equity has 
dropped to 0.18 (according to the article 7.4 / 40).  But what did it 
drop from ?  and since when ?  0.18 is still very high level of equity 
by international standards.  Agreed, there are other ways to measure 
equity, and the crisis (or downturn) in Korea.

But this figure of 0.18 is in itself,  no strong indication of destruction 
of the middle class in Korea.  (It is encouraging that htey are concerned 
abolut equity in Korea.  The US has abominable equity levels of 0.08, as 
I have previously pointed out.

The US which has a Distibutional Equity of only 0.8 (Distributional Equity
is income of lowest 20% /income of highest 20% of population).

For comparison [1] (1995)
Africa		0.13
China +**	0.14
Latin Am		0.07	
Middle East	0.10
S + SE Asia	0.18
E. Europe	0.23
FSU		0.22
N. America	0.11
Pacific OECD	0.16
W. Europe	0.19
US 		0.08
Korea (1999) [2]	0.18
		
[1] Raskin P, Gallopin G, et al 'Bending the Curve Toward Global 
Sustainability - Report to the Global Scenario Group' (1998) page A8 
http://www.gsg.org
[2] Korea Letter, Korea Times 13 May 1999 (Editorial) 'Crumbling Middle Class'

At 04:56 PM 5/19/99 -0700, you wrote:
>Here's some very recent information on the situation in South Korea.  The
>"economic miracle" has run into some serious "contraditions."  While
>aggregate economic growth seems to be likely to resume, there's a (sadly
>familiar) story of polarization unfolding, too.

(cut)
>
>David A. Smith
>Sociology, UC-Irvine
>
>
>KOREA LETTER
>THURSDAY, MAY 13, 1999
>
>KOREA TIMES
>
>EDITORIAL
>
>[Editorial] Crumbling Middle Class
>
>We are alarmed at the remarks of a high-ranking government official that
>the nation's middle class is crumbling under the lingering economic crisis.
>This situation is particularly worrisome because those in this social
>stratum are the backbone of society, largely responsible for maintaining
>its stability.
>
>The decline of the middle class is not merely a sign of economic
>difficulties, but an indication that society's existence may be in danger.
>The reduction in the number of people in the middle-income bracket points
>to the plight of salaried workers, the people hit hardest by the ongoing
>business restructuring program.
>
>This circumstance is actually nothing new and had been predicted from the
>onset of the crisis in late 1997. But senior presidential economic
>secretary Kang Bong-kyun's revelation that the situation is worsening has
>prompted a renewed sense of uneasiness. He said in a special lecture
>Wednesday that about 300,000 people are estimated to have fallen from
>middle-class to low-income status. The shrinking of the middle class is
>said to have made the rich richer and the poor poorer, a highly undesirable
>situation liable to cause friction between those in the different income
>brackets.
>
>Kang's announcement was based on the fact that the number of those on the
>welfare rolls, which stood at 1,414,000 in 1997, abruptly jumped to
>1,486,000 last year and to 1,745,000 in 1999. Meanwhile, the average
>monthly income of the middle class dropped by 10 percent to 1,730,000 won
>in 1998 from the previous year's 1,934,000 won.
>
>Other government data support our concerns. According to a report by the
>Office of Statistics, the top 20 percent of the population in terms of
>earnings accounted for some 40 percent of total national income last year
>whereas the share of the bottom 20 percent stood at only 7.4 percent. Thus
>the widening gap is clearly apparent, with 80 percent of the populace
>forced to share only about 60 percent of the nation's total income.
>
(cut)

Regards,
Geoff Holland
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