The Changing Faces of Inequality in South Korea in the Age of Globalization

Abstract

The social and cultural landscape of inequality in South Korea has changed significantly in the recent period. This article investigates the emerging pattern of social inequality in South Korea since the financial crisis in 1997-1998, focusing on changes in three major areas of social life: work, consumption, and education. The general trend of change has been increasing job insecurity for white-collar workers, the rise of consumption as a dominant basis of class distinction, and the intensification and globalization of educational pursuits. The study explores how these changes are connected to the globalization process and how South Korea's middle class is being transformed in this process.

At the turn of a new century, a major public agenda in South Korea concerns social polarization—polarization of society along economic status, regional ties, political attitude toward North Korea and the United States, as well as along gender and generation. Probably the most significant among these social schisms is the polarizing trend of economic distribution. Economic inequality in South Korea has grown significantly over the past decade, and the growing disparity is manifested in every aspect of social life from consumption pattern and lifestyle to residential segregation and educational opportunities.

This is a relatively new phenomenon in Korean society. Until recently, South Korea remained a relatively egalitarian society. Thanks to historic leveling conditions (including the Korean War, land reform, and the abolition of the old status system) and rapid economic growth in recent decades, people's living standards continuously improved, and a large number of people moved into the expanding middle class. By the mid-1980s, as many as two-thirds of Korean families regarded themselves as middle class.¹ The dominant public discourse in the 1980s was about creating one large middle-class society, just as had occurred in Japan two decades earlier and in the United States much earlier.

Recently, however, the landscape of South Korea's social inequality has changed noticeably. Social inequality has not simply increased in size, but its nature and form have changed in an important way. This new pattern of social inequality has emerged in the context of globalization and is closely related to the economic, cultural, and ideological changes brought about by this macro-global force.

This article sketches the changing pattern of social inequality in South Korea and examines significant social and cultural development associated with class structural transformation in the context of the current phase of globalization.

The data presented in this article are drawn primarily from secondary statistical sources, media reports, and published academic studies. I first discuss the impact of the 1997 financial crisis on the economic status of Korean workers because this event marked a major turning point in reconfiguration of the unequal Korean social structure. Then, I examine the emerging patterns of social inequality in three major areas: labor market, consumption behavior, and educational opportunities. Changes observed in these three areas demonstrate the powerful influence of globalization in transforming the nature of inequality and the way inequality is translated into cultural practices in today's South Korean society.

The Financial Crisis and Its Impact

The financial crisis of 1997-98 was a major disruption in the South Korean economy and in the livelihood of the Korean people. The crisis and the economic restructuring program mandated by the International Monetary Fund (IMF) inflicted huge consequences—propelling a staggering number of business failures, a sharp increase in unemployment, frozen wages and decreased domestic income, curtailment of non-wage benefits, and a growth in homelessness. The IMF has been widely criticized for implementing erroneous policies for the South Korean economy,² but the criticism came after a million jobs were lost and thousands of businesses failed due to excessively high interest rates and contracting financial policies.

In 1998, the South Korean economy recorded a -6.9 percent growth rate. The GNP per capita reached U.S. $11,422 in 1996 but fell to $6,800 in 1998. It began to climb up to the level of $10,000 only in 2002. Average urban household income declined by 14.4 percent...