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Of all the rich countries in the modern world it’s been suspected that Koreans live in the most dismal one and the numbers are proving this true.
After collating official figures to measure the country’s economic “misery index,” the results show that life of late has become dramatically tougher, according to a senior researcher at a leading banking group.
The country continually struggles to cope with weaker family finances, and widening inequality and unemployment as citizens pay a premium for a lifetime of mediocrity.
The misery index is an economic indicator created by economist Arthur Okun and is calculated by adding the unemployment rate to the inflation rate.
The concept is based on the assumption that higher unemployment and worsening inflation put economic and social strains on a country.
Song Tae-jeong, a senior researcher at Woori Financial Group, tweaked Okun’s formula to devise his own socio-economic misery index (SMI), which, in addition to inflation and unemployment, attempts to weigh the impact of the rich-poor game, crime and frequency of suicides more accurately.
The index’s base of zero was set from the average measurement of these factors in the 19 years between 1999 and 2011.
Based on Song’s criteria, the life of the average Korean is worse now than it was after the late-1990s financial crisis.
Korea’s SMI between 2008 and 2011 came in at 3.2, a dramatic rise from the 0.7 measured between 2003 and 2007 when Cheong Wa Dae was occupied by the late Roh Moo-hyun.
The country’s SMI under the Kim Dae-jung government (1998-2002) was 0.6. However, the index did hit a single-year high of 5.2 in 1998, when Korea underwent a near financial meltdown.
“The SMI peaked during the Lee government as the chasm between the richest and poorest Koreans became wider, subsequently contributing to higher crime and suicide rates,” Song said.
Song’s analysis was consistent with the state-run Korea Development Institute’s (KDI) quality-of-life survey last year, which placed Korea 27th among the 39 industrialized nations that make up the Organization for Economic Cooperation and Development (OECD) and G20, based on data for 2008.
Average Koreans continue to see their living standards deteriorate as wages fail to keep up with the rising cost of living. And the country’s historically-high household debt, at near one quadrillion won, matches an entire year’s gross domestic product (GDP), while an alarmingly large portion of working-age Koreans remain sidelined from the labor market.
And there is still room for things to get worse. Harsher global conditions caused by the eurozone debt crisis, are hitting the country’s export industry in the teeth. This could damage growth and further deteriorate the job market.
Song claims that the country urgently needs plans both for the foreseeable future and in the long-term to escape the vortex of social and economic problems that plague the life of everyone here except the wealthiest.
Meanwhile Korea is notorious for its high suicide rate. Its 28.4 suicide deaths per 100,000 people in 2009 marked the highest among OECD nations by a comfortable margin, with Hungary (19.8) and Japan (19.7) next on the list.
Korea also struggles to deal with crime, including a surge in violence, sexual offenses and murders. A recent rape-and-murder case in Sunwon, Gyeonggi Province involving a Chinese-Korean suspect and a victim in her 20s sent shockwaves across the nation.
“It’s doubtful that Koreans will be happier this year. Indicators like the GNI per capita or inflation have yet to show that the squeeze on living standards will ease,” Song said.
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