Korea throughout History has had its fair share of turmoil with colonization, slavery and war. Most recently, after a long struggle it has established a fully democratic government fighting through 40 years of turbulence preceding the end of the Korean War. But despite South Korea’s rapid growth and vast success, there are still big challenges it must face. With 15.1% of South Koreans living in relative poverty, soaring housing and rental costs and a tight and highly competitive job market, there are still some harsh realities South Korea’s poorest citizens must contend with.

Social Stigma

In South Korea, entering the world of employment can be a stressful ordeal. As of 2009, South Korean university students take five years and four months on average to complete a four-year degree. One reason is the high societal expectations on individuals to find employment and achieve financial and material success, thus some students prolong their graduation to maintain the title of student.

For those living under the poverty line, these stigmas stretch further, working in low-paying jobs and struggling to provide the necessities for themselves and their families, this reality can be incredibly isolating as they are subject to prejudice. This further leads the poor in South Korea to become marginalized members of their communities.

Salary Disparity

In the 1960s, South Korea’s government wanted a rapid economic boost. So, it turned to Chaebols, business conglomerates that specific South Korean families run. The Chaebols are family-run businesses that were given a large amount of support from the government to boost business and exports. This worked wonders, even today these Chaebols are vital to South Korea’s Economy. Samsung for example, is responsible for 20% of Korea’s GDP. 

There is a lot of competition to work for companies like Samsung which can offer more incentives, job security, insurance, higher wages and better working spaces. Adversely, it leaves smaller companies scrambling for business and forced to pay far lower wages, fewer benefits and constant concerns regarding job security. 

Large companies offer only 13.9% of jobs in South Korea, creating a large disparity between these highly sought-after jobs and employment opportunities from smaller companies, or part-time/temporary positions. This makes it very difficult for the poor in South Korea to lift themselves out of relative poverty, because of a lack of stable opportunity and an incredibly competitive job market. 

Housing Crisis and Ageing Population

In 1997, South Korea suffered through the Asian financial crisis. During this time, South Korea’s most vulnerable turned to jjokbangs. These small, cramped, improvised dwellings became home to many poor in South Korea, who had nowhere else to go. These jjokbangs average around 35 square feet, however, they gave a living space to otherwise homeless individuals. This term is still in use today and is associated with poverty and a last option for the poor in South Korea.

According to the Los Angeles Times, in 2023 there were more than 3,000 jjokbangs in the Seoul greater metropolitan area alone and the prices for apartments have increased by 58% between 2017 and 2021. It has been at the forefront of political manifesto, with voters trying to find legitimate plans for new housing projects. 

Therefore, it is a difficult and frustrating time for young South Koreans, newlyweds, the elderly and the poor of South Korea who cannot afford to invest in property or pay rent because of the state of the housing market and the lack of affordable and sufficient accommodation.

Data from the OECD shows currently 48.6% of South Koreans, 65 and over are living under the poverty line and are among Korea’s poorest citizens. It is estimated that by 2025 Korea will have entered a ‘super-aged’ population, more than 20% of Korea will be over 65. There is a grave concern about the safety and security of Korea’s elderly.

South Korea’s Bright Future

In the fight against poverty, South Korea has taken these issues seriously and has implemented new policies to strengthen its welfare state. In recent years the government has raised the minimum wage, in an attempt to lessen the wage gap between the rich and the poor. 

It has implemented a safety net basic pension scheme which provides to 70% of those 65 and older. Therefore, the amount spent on Pension spending has increased from 1.9% of the GDP in 2000 to 4% in 2020, as more people are becoming eligible. This will likely increase in the coming years with South Korea’s ageing population and could prove vital, especially to elderly South Koreans living in Poverty.

The government also pledged to supply 830,000 housing units by 2025 to create more affordable housing for the younger generation, according to The Korean Herald. It hopes to build smaller, higher-quality apartments but offers them as low-cost public rental housing. In hopes of alleviating the market and giving Koreans better options for housing. 

South Korea has proven that it can take big ideas and make them a reality, as a previous receiver of assistance from the Organisation for Economic Cooperation and Development (OECD), a collection of countries that hold each other accountable by sharing skills and suggesting new policies for the betterment of its citizens. South Korea is now a proud member and has offered insight into education, technology, and sustainability, all areas it has performed well within its own country.

– Phil Mundy

Phil is based in Bristol, UK and focuses on World News for The Borgen Project.

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