By Kim Da-ye
Getting out of poverty or moving into an upper-income bracket has become increasingly challenging, especially for low-income households, a survey showed Tuesday.
According to the survey conducted by the Korea Institute for Health and Social Affairs (KIHASA), 31.2 percent of the surveyed low-income households moved out of the low-income bracket into the middle- or upper-income segments between 2005 and 2006. However, it fell to 23.5 percent between 2011 and 2012.
Climbing up from the low-income group to the upper-income group has also become a rarity. In 2006, more than 2.5 percent of low-income households joined the high-income earners. In 2012, a mere 0.5 percent became much richer than a year ago.
Lee Bong-joo, a professor of social welfare at Seoul National University, who co-authored the report, said the low-income group's class mobility dropped due to the lack of jobs and the inadequacy of the social welfare system.
"People get out of poverty by finding a job, and that isn't working now. Korea also has a high poverty rate among the elderly as the social welfare system and anti-poverty measures are not working. For example, the national pension hasn't matured yet," said Lee.
To improve the class mobility of the poor, the professor said that job creation remains the only viable option. "For those who cannot get work, society should guarantee a minimum quality of living," he added.
In the meantime, the upper class was barely affected by the years of economic slowdown. In 2006, 76.7 percent of high-income households stayed in the same group compared to a year ago, and 75.5 percent gave the same answer in 2011.
The most stable income group seems to be the middle class. The portion of the middle-income households that fell into the low-income group within a year was 10.6 percent in 2006 and 10 percent in 2012.
The share of middle-income earners who stayed within their class increased from 76 percent in 2006 to 79 percent in 2012.
Lee, however, pointed out that it isn't a positive trend because the middle class had shrunk in the past and should expand along with the economic recovery.
"The size of the middle class kept shrinking in the past. It seems to stay unchanged over the past few years, but it should actually increase," said Lee.
The survey by the Korea Welfare Panel of KIHASA was carried out for seven consecutive years, and it covers changes between 2005 and 2012. More than 5,000 households participated in all seven surveys.
The study defined the low-income class as households that earned less than 50 percent of the median of Korea's ordinary income.
Ordinary income is regular, expected earnings including wages, regularly paid bonuses, rent, interest earnings and government support.
Winning a lottery, for example, wouldn't be considered an ordinary income. The households earning between 50 to 150 percent of the median ordinary income are considered to be in the middle-income group, and those that earn more belong to the upper-income bracket.
The average ordinary income was 44.4 million won in 2012, and the median was 36.5 million won. The average ordinary income of the low-income group was 12 million won while that of the rest was 57 million won.
Getting out of poverty or moving into an upper-income bracket has become increasingly challenging, especially for low-income households, a survey showed Tuesday.
According to the survey conducted by the Korea Institute for Health and Social Affairs (KIHASA), 31.2 percent of the surveyed low-income households moved out of the low-income bracket into the middle- or upper-income segments between 2005 and 2006. However, it fell to 23.5 percent between 2011 and 2012.
Climbing up from the low-income group to the upper-income group has also become a rarity. In 2006, more than 2.5 percent of low-income households joined the high-income earners. In 2012, a mere 0.5 percent became much richer than a year ago.
Lee Bong-joo, a professor of social welfare at Seoul National University, who co-authored the report, said the low-income group's class mobility dropped due to the lack of jobs and the inadequacy of the social welfare system.
"People get out of poverty by finding a job, and that isn't working now. Korea also has a high poverty rate among the elderly as the social welfare system and anti-poverty measures are not working. For example, the national pension hasn't matured yet," said Lee.
To improve the class mobility of the poor, the professor said that job creation remains the only viable option. "For those who cannot get work, society should guarantee a minimum quality of living," he added.
In the meantime, the upper class was barely affected by the years of economic slowdown. In 2006, 76.7 percent of high-income households stayed in the same group compared to a year ago, and 75.5 percent gave the same answer in 2011.
The most stable income group seems to be the middle class. The portion of the middle-income households that fell into the low-income group within a year was 10.6 percent in 2006 and 10 percent in 2012.
The share of middle-income earners who stayed within their class increased from 76 percent in 2006 to 79 percent in 2012.
Lee, however, pointed out that it isn't a positive trend because the middle class had shrunk in the past and should expand along with the economic recovery.
"The size of the middle class kept shrinking in the past. It seems to stay unchanged over the past few years, but it should actually increase," said Lee.
The survey by the Korea Welfare Panel of KIHASA was carried out for seven consecutive years, and it covers changes between 2005 and 2012. More than 5,000 households participated in all seven surveys.
The study defined the low-income class as households that earned less than 50 percent of the median of Korea's ordinary income.
Ordinary income is regular, expected earnings including wages, regularly paid bonuses, rent, interest earnings and government support.
Winning a lottery, for example, wouldn't be considered an ordinary income. The households earning between 50 to 150 percent of the median ordinary income are considered to be in the middle-income group, and those that earn more belong to the upper-income bracket.
The average ordinary income was 44.4 million won in 2012, and the median was 36.5 million won. The average ordinary income of the low-income group was 12 million won while that of the rest was 57 million won.
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