Reshaping the Future : How to Tackle Inequality

Last year’s GNI per capita approached $30,000, reaching a level comparable to that of advanced countries. However, evidence suggests a worrying trend in the society, particularly the widening gap between the haves and have-nots. The top 10% controls half of all income, making Korea one of the most unequal countries in the world. In fact, inequality is not only a big threat to Korea but also to the world. The World Inequality Report 2018, which relies on the 2017 work of over 100 researchers in more than 70 countries, reveals that since 1980, the 7.6 million people in the top 0.1% increased their wealth by as much as the poorest half or 3.8 billion people.

As for Korea, capital gains associated with real estate property and financial assets are exacerbating deeply entrenched wealth inequality. Half of all Korean’s personal wealth comes from real estate such as land and apartments, which generate far faster and easier income than labor income. Children even dream of becoming building owners. The trickle-down effect, a term used to describe the benefits of economic growth trickling down to the poor, seems to have disappeared. Inequality is rather a drag on growth.

Meanwhile, the government has failed to gain traction in its ongoing effort to reduce inequality, which mainly depends on job creation measures. Employment rebound is only led by low quality jobs amid jobless growth, whereas low wages and career break have led to the rise of  a new class of “working poor.” The current administration seeks to improve the income distribution structure with income-led growth. However, as can be seen from the controversy over the minimum wage, the government’s attempt is only fueling “disputes among the powerless.” 

Worse yet, AI-driven advances in fourth industrial revolution technologies are transforming the nature of labor and distribution. A larger inequality looms for the country, with: (1) jobs under increasing threat by automation and (2) the rise of precarious platform labor. The changing competition landscape of the global industries is also causing the manufacturing decline, hence crippling the local economy and increasing the risk of unemployment and poverty. In fact, the shutdown of shipyards and automotive plants has destroyed local economies of Gunsan and Geoje.

Inequality is known to be “the biggest challenge facing the world,” as it upends lives. The 9th ASIA Future Forum will unleash the power of imagination to reduce inequality, and build a more equal and dynamic society. It will provide a platform for in-depth discussions on concerns pertaining to inequality, with topics ranging from inclusive growth and sustainable development, the role of the social economy and social values, the future of labor and social dialogues, local regeneration, to social security restructuring.