While K-Pop and Korean culture has appeared in mainstream media, the looming presence of poverty in South Korea has not. According to the World Bank’s 2018 GDP rankings, the Republic of Korea stands as the world’s 12th largest economy, making it understandable that poverty in South Korea is not making global headlines. For the people of South Korea, a country roughly the size of the state of Illinois, this economic achievement is a massive source of national pride. As the “miracle of the Han River,” South Korea’s economic transformation from 1961 to 1997 strengthened the narrative of South Korea as an Asian economic powerhouse. Here is some information about the history of poverty in South Korea.
History of the Korean Economy
Poverty in South Korea has always held a place in history. Korea received liberation from the Japanese empire’s 35-year colonial rule in 1945. When the Korean War broke out in 1950, the Korean economy was largely agrarian. By the time the War concluded in 1953, an estimated 5 million people died. Among the 5 million dead, half of the casualties were civilians and the nation’s economy suffered equal devastation. By the conclusion of the Korean War in 1953, the GDP of South Korea was only $40.9 million. In comparison, South Korea’s GDP in 2015 was $1,485 trillion.
Economic Growth Igniting in the 1960s
Korean historians note the 1960s as a time of rapid economic growth in South Korea. Initially, the South Korean economy still depended largely upon foreign aid, although South Korea went through rapid industrialization under President Park Jeong Hee, an army general who seized government control in 1961. The major challenge facing President Park Jeong Hee was the lack of natural and raw resources after the war. Most of the natural resources in the Korean peninsula were in North Korea; therefore, South Korea had limited products for export. In 1964, the South Korean government hatched a plan to start the export of wigs. South Korean women began selling hair to wig factories and by 1970, wigs accounted for 9.3% of South Korea’s overall exports.
Japanese Manufacturing to South Korea
In conjunction, many Japanese textile and electronics companies began moving labor-intensive assembly plants to South Korea. As companies hired Koreans as plant employees, they gained knowledge that eventually aided in the start of Korean-owned electronics corporations. Further, the South Korean government aided in funding business conglomerates, such as Samsung and LG, by providing substantial subsidies and loans. Despite this profound economic growth, poverty in South Korea was still present from the Korean War.
The poverty-stricken Korean assembly workers made the miracle of the Han River possible. During South Korea’s rapid growth, the government’s focus on cheap exports resulted in the repression of workers’ rights. For example, competing within the international market, Korean chaebols maintained a low labor cost, resulting in underpaid workers. Additionally, it was common for manufacturing workers to work 10-hour days every day of the week. Employers and the government often ignored safety regulations and concerns too. President Park Jeong Hee outlawed unionization, making it impossible for workers to fight for rights.
In a Washington Post 1977 report, the reality of Korean workers during the 1970s was clear. William Chapman shadowed a Korean woman, Miss Lee, and found, “[that] while Korea has gleaming new factories and a growing middle class, it remains a land of miserable poverty and Dickensian wage and employment conditions for the working class.” Chapman reports abuse such as low daily wage, long working hours and lack of workers’ bargaining powers. Chapman’s work reflected terrible working conditions and their implications on poverty in South Korea.
South Korean Poverty Today
While poverty rates have significantly decreased since the 1970s, poverty in South Korea is still present. Today, two major groups experience poverty in South Korea: the non-regular workers and the elderly.
The term non-regular workers refers to the fixed-term, part-time and dispatched workers who constitute one-third of employees in South Korea. In addition to a lack of job security, non-regular workers typically earn one-third less than regular workers. This income inequality is titled market dualism. Because of the income gap, non-regular workers have less access to insurance and company-based benefits.
Many of the South Korean elderly also live in poverty. Because of their high seniority-based wages and dated industry knowledge, most workers must leave their companies at around age 50. In 2017, the unemployment rate for the 55 to 64 age group was 67.5%, which is above the OECD average of 59.2%. Those who are employed usually find themselves in temporary employment with low wages. While South Korea has a national pension service, the recent rise in the elderly population is putting a strain on the system.
The history of poverty in South Korea comes from the country’s war-torn society. The rapid economic growth during the 1960s and the 1970s came at the cost of workers’ rights and exploitation, and ultimately, the poor in South Korea. In 2020, South Korea still struggles to make equitable working conditions for the elderly and non-regular workers.
– YongJin Yi