Often found at theaters and museums, Kwon Mee-yoo has covered a wide range of cultural fields from K-pop and dramas to theater and fine art for over a decade. Now as K-Culture Desk editor, she tries to connect Korean culture with global readers through fresh perspectives.
Middle class takes brunt of financial crisis
By Kwon Mee-yoo
Staff reporter
About one third of middle class families in Seoul suffered a drop in their income in the fallout of the 2008 global financial crisis, and more than half of them have been forced to reduce spending.
The Seoul Development Institute (SDI), a non-profit research organization established by the Seoul Metropolitan Government, surveyed 1,000 middle-class households in June 2009 and found that 31 percent of the respondents saw their income decline in the wake of the financial meltdown.
The SDI defined a "middle class" household as one with a monthly income between 1.5 and 4.5 million won.
"The latest financial crisis did not cause mass unemployment like the Asian financial crisis in the late 1990s, but it resulted in a worsening of the financial condition of the middle class," said Kim Kyung-hye of the SDI.
Kim said the government's welfare program also needs to pay greater attention to the shrinking middle class.
"We should change the paradigm of our welfare programs so that the lower-end of the middle class can be included and protected."
Among the middle class, those with a lower income saw it reduced the most.
Thirty-nine percent of those who earn 1.5 million to 2 million won per month said their income decreased, while only 26 percent of those who make 3 million to 4 million won suffered a decline in their income.
More than 54 percent of those surveyed said they had cut down on their living expenses. Dining-out, followed by other food expenses and private education costs were reduced in that order.
Some 64 percent had worsening housing conditions after the financial crisis ― 33 percent moved to smaller houses, while 31 percent moved from their own house to rental homes.
Forty percent of the surveyed suffered deficits in their household balances as their income could not cover expenditures, and 32 percent had to borrow money from banks, relatives or private lenders to fill the gap.
Financial hardship also negatively affected family relations. After the 2008 crisis 10 percent said quarreling or family feuds had increased, while 5 percent were considering divorce.