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The middle class in Korea does not consider themselves as such. The affluent see themselves only as average, and the average regard themselves as low-income. A recent report from the Korea Development Institute (KDI), titled "Who are Korea's Middle Class?" illustrates these attitudes.

The middle class, or those between the upper and lower classes in terms of income or social status, is commonly understood as "ordinary people who are not rich but have a certain level of comfort and do not worry about making ends meet."

Since the median monthly income for a four-person household was 5.34 million won ($3,906) in 2021, one could argue that an income exceeding 7 million won per month qualifies as high income. According to the report, however, only 11 out of 100 such households consider themselves upper class, while 76 perceive themselves as middle class, and 12 think of themselves as low-income. So among those who earn over 7 million won per month, the proportion of those who consider themselves low-income is higher than those considering themselves upper class. Furthermore, about 40 percent of the middle class, based on asset and income criteria, perceive themselves as "lower class."

This perception is in stark contrast to the past. During the 1980s, three out of four considered themselves middle class.

All governments, regardless of political affiliation, proclaimed that they would expand the middle class, and President Yoon Suk Yeol is no exception. He said he would open an era centered on the common people and the middle class. So why have Koreans lost confidence in their middle-class status?

"Well, I should be grateful for my current life. But I don't even dream of going on an overseas trip. It's not like we spend a lot on the private education of our daughter, but it's about 1.5 million won. It goes over 2 million won during vacations since she goes to more hagwons. And after mortgage payments, it's just the basics."

That's what one of my friends, whose husband works for a conglomerate, earning nearly 8 million won per month on average, told me when I asked if she considered herself middle class. According to a 2023 survey by Statistics Korea, the total annual expenditure on private education amounted to about 27 trillion won, and the monthly average private education expenditure per student was estimated to be 430,000 won. For high school students receiving private education in the Seoul area, the average was 988,000 won.

A couple I know, both of whom work for a state-run enterprise, make more than 10 million won a month. However, they don't consider themselves well-off.

"Ten million won isn't small, but we don't own a home. We started without any help from our parents, and we're still on a jeonse lease. We have been saving millions of won each month, but Seoul's property prices have soared steeper than our savings. How can we be middle class without a home?"

The KDI report noted that assets seem to matter in people's perception of middle class. It is not only about whether you own a home or not. It also matters what kind of home it is, and where it is located. An apartment in Seoul – a symbol of middle-class life in Korea — is not easy to get. The median transaction price for an apartment in Seoul is 950 million won, while the average net assets of Korean households last year were 435 million won.

With private education spending that has virtually become a quasi-tax and soaring housing, Koreans have reason to consider themselves poorer than they actually are.

However, such a contraction of the middle class has a significant impact on individual happiness. According to a study by the Hyundai Research Institute, those who perceive themselves as middle class were 82.3 percent satisfied with their lives, while those who perceive themselves as low income were only 55.5 percent satisfied. Interestingly, even with the same income and assets, there is a significant difference in life satisfaction depending on class consciousness.

For example, among those with a monthly after-tax income in the 5 million won range, the life satisfaction of those who perceive themselves as middle class and those who perceive themselves as low income was 87.0 percent and 59.6 percent respectively, a difference of 27.4 percentage points. This pattern was consistent across other income brackets as well.

Therefore, the Hyundai Research Institute report pointed out the importance of creating conditions for individuals to see themselves as middle class, recommending measures such as expanding public rental housing to alleviate the housing burden, supporting their purchase of homes,supporting having children, offering childcare services and strengthening public education. This report is from 10 years ago. But not much seems to have changed.

The writer is the finance editor at The Korea Times.