The annual income gap between South Korea’s richest and poorest households has exceeded 200 million won for the first time. (Image courtesy of Yonhap)
SEJONG, Jan. 6 (Korea Bizwire) — The annual income gap between South Korea’s richest and poorest households has exceeded 200 million won for the first time, while the gap in their assets has grown to more than 1.5 billion won.
As economic polarization continues to deepen, policy solutions have stalled, particularly after President Yoon Suk Yeol’s declaration of martial law just three weeks after announcing income inequality as a key policy priority, pushing the issue to the background amid political turmoil.
According to recent government data, households in the top 10% income bracket earned an average of 210.51 million won annually last year, marking the first time this figure has surpassed 200 million won since record-keeping began in 2017. This represents an increase of 13.04 million won (6.6%) from the previous year’s 197.47 million won.
The growth was primarily driven by a sharp 24.7% increase in property income, which rose by 4.59 million won. Labor income grew by 5.72 million won (4.1%), while business income increased by 2.62 million won (7.5%).
While the bottom 10% saw their annual income rise by 650,000 won (6.8%) to 10.19 million won, this modest increase did little to narrow the growing income divide. The gap between the top and bottom 10% reached a record 200.32 million won.
Analysts attribute this widening disparity to increasing wage gaps between large and small companies amid generous performance bonuses at major corporations, coupled with growing investment and dividend income among high earners.
The income inequality has translated into asset disparities, with the top 10% holding assets worth an average of 1.63 billion won, more than 1.5 billion won higher than the bottom 10%’s 128.03 million won.
Despite President Yoon’s November 11 announcement identifying income and education inequality as key policy priorities for the latter half of his term, the subsequent declaration of martial law on December 3 and ensuing political chaos, including an impeachment vote in the National Assembly, have effectively sidelined discussions on addressing economic polarization.
Experts warn that postponing solutions to inequality is no longer an option. “There’s an urgent need to establish safety nets for vulnerable low-income groups,” said Kim Kwang-seok, head of economic research at the Institute for Korean Economy and Industry. He noted that structural reform discussions, including addressing polarization, have been deprioritized due to political instability.
“If we continue to delay addressing these structural, long-term challenges, they will become insurmountable,” Kim added, emphasizing the need to tackle both immediate political risks and fundamental structural issues simultaneously.
M. H. Lee (mhlee@koreabizwire.com)
