Wealth gap in S. Korea peaks in 2008: data

SEOUL, May 21 (Yonhap) -- A protracted economic slump caused South Korea's wealth
gap to peak in 2008, indicating the underprivileged are more vulnerable to job
reductions and toughening business conditions, data showed Thursday.

According to the data provided by the Ministry of Strategy and Finance and the
National Statistical Office, the Gini coefficient for urban households stood at
0.325 last year, slightly up from the previous year's 0.324.
The 2008 figure is the highest ever since related data started to be compiled in
1990 and is even higher than 0.295 posted in 1998, just after the Asia-wide
financial crisis hit the nation.
The Gini coefficient is a key barometer of wealth distribution that reveals a
widening income gap when the numbers approach one and a more equitable
distribution if the numbers are closer to zero. It reflects income from labor,
business, asset and financial holdings.
The data came as South Korea was buffeted by the global recession that started in
the wake of worldwide financial turbulence last summer. The economy, Asia's
fourth-largest, is feared to lapse into a recession for the first time in more
than a decade this year as domestic demand weakens and exports decline.
South Korea's financial markets also suffered sharp fluctuations, leaving
low-income earners more vulnerable than those with deeper pockets. The benchmark
KOSPI plummeted by nearly half last year.
Job losses accelerated as companies reduced investment and recruitment in the
face of cloudy economic outlooks despite the government's stepped-up efforts to
create jobs.
Experts worry that the wealth gap could widen further this year as temporary and
contract workers are the first to be fired amid a sharp economic downturn, while
more small-sized businesses and the self-employed face closures due to declining
demand.
"The gap between the rich and poor has been on a steady rise in recent years,"
said a researcher at the state-run think tank Korea Development Institute. "An
economic slump will likely drive the Gini coefficient even higher this year."
kokobj@yna.co.kr
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