By Kang Seung-woo
As the COVID-19 pandemic continues to extend into a second year, polarization and inequality have accelerated in various areas of society, emerging as a hot-button issue that the government should immediately address.
However, even before addressing these problems, the unprecedented pandemic has deepened polarization dependent on differing types of situations. Over the past few weeks, The Korea Times has interviewed several people in different age and occupation groups to see how the coronavirus has impacted the everyday lives of Koreans, and they all agree that something is going wrong.
“I think polarization is a natural phenomenon in society that is also happening in the United States and Britain,” said Lee Jae-yeon, a 26-year-old man working at a startup.
“However, it is still questionable whether Korea is moving in the right direction.”
Small businesses perish; platforms flourish
While COVID-19 has had a devastating impact on the national economy, some industries have borne the brunt of the pandemic much more than others. In particular, small business owners in the restaurant, travel and accommodation sectors have been hit hard.
According to a recent poll by the Korea Economic Research Institute that interviewed 500 owners of businesses in eight areas including a high proportion of proprietors of restaurants, wholesalers, retailers and accommodation facilities, 39.4 percent of them said they were currently considering closing down.
For some time, the government has implemented a Level 4 social distancing system in Seoul and its surrounding area, which mandated curfews on restaurant hours and caps on the size of private gatherings.
“A large number of small business owners run restaurants, but due to the pandemic-induced restrictions on gatherings and working from home, they are struggling to make a living,” said Kim Chang-beom, 50, who used to run a cafeteria.
“What is worse is that most owners are retirees who are not comfortable with the currently booming tech-based food delivery services, so they are prone to fall behind in the competition against those who are relatively younger and tech-savvy, and will lose their money, mostly severance pay.”
| Delivery drivers are seen in Seoul in this July 12 photo. Delivery services for food and online shopping purchases have been flourishing as people have used them more often amid social distancing rules to combat COVID-19. Yonhap |
On the other hand, platform businesses, led by app-based food delivery services, saw their sales rise over the past year.
The nation's top food delivery app Baedal Minjok, also known as Baemin, saw sales of 1.09 trillion won, up 94.4 percent from the previous year thanks to greater demand for food deliveries in the wake of the COVID-19 pandemic, which saw more people stay at home as they complied with social distancing measures.
With pandemic-caused polarization emerging as a social problem, the government decided to add 60 trillion won to the 160 trillion won initially allocated to contain this economic disparity by 2025 under the Korean New Deal 2.0, one year after the introduction of the original plan.
In the upgraded plan, the government expects to create 600,000 more jobs in addition to the 1.9 million jobs projected under the original plan.
| A for-lease sign is displayed on the door of a shop in Myeong-dong, Seoul, Nov. 26, 2020. More than 40 percent of shops in the popular tourist district have closed amid the COVID-19 pandemic. Korea Times photo |
Lottery tickets sell well, so do luxury goods
Another pandemic-accelerated polarization in consumer spending has come to the fore with lottery ticket sales booming last year, while at the same time the sales of luxury goods remained unscathed
According to Democratic Party of Korea (DPK) Rep. Koh Yong-jin, last year's lottery revenue reached a record-high 5.41 trillion won, up 12.9 percent from the previous year, and revenue from the first half of this year reached 2.93 trillion won on pace to surpass the 2020 figure.
Lottery tickets are one item that sells well in a recession.
Meanwhile, high-end luxury goods sold like hotcakes, as evidenced by photos showing consumers waiting in a long line in front of a Chanel store in Seoul.
According to Rep. Suh Byung-soo of the main opposition People Power Party, special consumption taxes levied on the sale of imported luxury bags last year came to 25.6 billion won, up 38.1 percent from the previous year, marking the largest increase among high-priced products.
“The estimated total value of imported luxury bag sales came in at 174.1 billion won in 2020,” Suh said.
As the prolonged pandemic has constrained the everyday lives of people for more than a year, more Koreans, stripped of social activities and recreational trips, are looking for comfort in what many have strangely labeled as “revenge spending.”
| Shoppers line up in front of a Shinsegae Department Store in central Seoul to buy luxury products, May 30. Korea Times photo |
Sales of luxury fashion goods remained intact in 2020 despite the pandemic-wrought economic woes, posting a total of $12.54 billion last year compared with 2019's $12.52 billion, according to the research firm Euromonitor. The corresponding sales on the global market dived 19 percent last year from a year earlier, driven mainly by contracting sales in the United States and Japan, France and other European countries.
“While I am agonizing over increasing consumer prices, I find many people around me planning sightseeing flights so they can shop in duty free stores at airports that offer a variety of promotions. It makes me feel like we are in a different world,” said Kim Youn-soo, 38.
Sightseeing flights refer to a tour program by airlines flying passengers over other countries or cities without landing and then returning to their point of departure.
“The polarization of consumption was brewing in pre-COVID times, but it seems to have been accelerated by the pandemic,” she added.
Online classes widen educational gap
Korea is globally known for its extremely high educational aspirations and academic enthusiasm, as education is widely seen as a key to success in Korean society, and the pandemic has widened the learning gap here.
Due to the pandemic, in-person classes were shifted to online ones for a long period of time to stem the spread of the coronavirus, and the change has greatly impacted the academic achievements of students. As public education has been unable to play its role properly, parents with money have turned to private education, widening the gap between children who receive such teaching and those who do not, with schools eventually seeing students in the mid-level academic group shrinking significantly.
According to a poll conducted by the office of DPK Rep. Kang Deuk-gu, more than 70 percent of 22,544 students, parents and teachers agreed that the pandemic had deepened the education gap amid a growing dependence on private education.
“Public education seems to be completely suspended,” said Kim Youn-soo, who is a mother of three children, two of whom are twins scheduled to enter elementary school next year.
“Due to the coronavirus, I had to recruit private tutors instead of sending my children to crowded educational institutes. Given that there is no sign of the pandemic slowing down, I am uneasy about how long I can afford it. I just wanted to raise my kids in a normal way, which seems to have become impossible.”
According to the education ministry and Statistics Korea, the average monthly private education expenditure on middle and high school students increased by 2.5 percent and 5.2 percent, respectively, to 492,000 won and 640,000 won ($543), last year compared to 2019.
“Even before COVID-19, there was an education gap between students who could receive private education and those who could not, depending on their parents' financial strength, but due to COVID-19-induced school closures, the educational gap between students seems to be widening,” said Ko Sung-nam, 42, who has two daughters.
Ko said virtual classes were difficult for his daughters to concentrate on and the programs were unsatisfactory.
“In order to improve their academic performance, they receive private tutoring, but it is a significant burden in terms of household expenditure compared to before,” he added.
Ministry data also revealed the higher a household's income level was, the more the parents spent on education. Households earning 8 million won or more per month spent a monthly average of 504,000 won per child on private education last year, more than five-fold the 99,000 won spent by households earning less than 2 million won.
“With asset price hikes and recent job cuts, polarization has been deepening. In addition, technology continues to progress, and polarization intensifies as some people are unable to keep up with the latest trends,” said Sung Tae-yoon, an economics professor at Yonsei University.
“Unless the government addresses those issues, polarization will continue.”