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EDAlarming income gap

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Time to taker bolder steps to ensure equal opportunities

South Korea's income disparity between the rich and the poor is almost at the worst level among the 36 member countries of the Organization of Economic Cooperation and Development (OECD). This sounds an alarm over the country's widening income gap.

According to the latest OECD statistics, the top 10 percent of Korean income earners get paid 4.3 times more than the bottom 10 percent. The figure is the second-highest after 5.07 times in the United States.

As for the reason for this polarization, economic experts cite the wide income gap between employees of large companies and small- and medium-sized enterprises (SMEs). The income disparity between regular and non-regular workers is also partly blamed for the problem.

In fact, wages at SMES are about 60 percent of those paid by big corporations. Non-regular workers earn 50 to 70 percent what regular employees earn.

Big companies typically record good sales results, boosted by their export-oriented strategies, but small companies are showing a poor performance due to the chronic stagnation of domestic demand, resulting in the wage disparities.

Rampant discrimination against part-time and temporary workers is the underlying cause of the polarization in terms of wages, fringe benefits and working conditions. Big companies having the bad practice of exploiting subcontractors are also blamed for causing workers at small firms to get lower wages.

First of all, the authorities have to enforce related laws strictly to crack down on conglomerates for maximizing their profits at the sacrifice of small companies and their workers. And all economic players should work together to narrow the income gap.

The shorter 52-hour workweek, which went into effect last month, may become another serious factor in widening wage disparities. It will inevitably lead to a sizable fall in overtime work and the reduction of night shift and holiday allowances. The problem is that low-income earners will be more adversely affected by the new workweek than those who earn more.

Widening wage disparities bear heavily on low wage earners, forcing them to feel an ever greater sense of deprivation. This phenomenon will certainly deepen income inequality, undermining social cohesion and bringing about conflict between the haves and have-nots.

Now is the time for the government to take bolder measures to narrow wage disparities and ensure equal opportunities. But it is easier said than done because President Moon Jae-in's inclusive growth policy is suffering setbacks due to his failure to create more jobs, particularly for the poor.





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