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South Korea Wages and Living Conditions
The economic expansion of the 1980s caused rapid improvements
in the living conditions of many South Koreans, which does not
mean, however, that all lived comfortably. Indeed, one had only
to wander the narrow alleys of Seoul, Inch'on, or other South
Korean cities to see poor living conditions. In 1990 families in
slum areas of Seoul usually had electricity and running water, as
well as a small range for cooking, a television, and a radio or
two. But living space was crowded, furniture was shabby, and
buildings were badly built and gloomy. People in poorer families
seemed to be fairly healthy and had adequate diets. The level of
starvation, as well as the cost of some foodstuffs, seemed low.
Beggars and the homeless who wandered the streets were
infrequent. Although there were some noticeable exceptions,
farming families generally lived in small houses, with few of the
basic luxuries of middle-class urban families.
Living conditions in South Korea's cities, however, were
improving in the late 1980s. According to the Economic Planning
Board, in April 1988, the average monthly income in Seoul and
other major cities was 612,400 won (US$868) a rise of 16.1
percent over the previous year.
A composite portrait of average middle-class families in
Seoul would show the following: a husband in his early forties, a
wife about six years younger, and two children, aged thirteen and
ten. The family would live in a fairly small apartment,
consisting of a hallway, one small bedroom with bunk beds for the
children, a small room with several bureaus and with mats as
floor coverings, a television set and a videocassette recorder,
and a hi-fi stereo. This room would serve as an eating area and
family room during the day and as the parents' sleeping area at
night. There also would be a larger room partitioned off into
three sections: a living room with three elaborate easy chairs, a
more formal dining area, and a small kitchen with an oven-range,
sink, washing machine, shelves, and cabinets. The mother would
stay at home; the father would work from 9:00 A.M. to 10:00 P.M.
six days a week. There would be a fairly new car, probably a
Hyundai, which the father would use to drive to work.
A survey of income distribution in South Korea in 1985 and
1988 showed that average household income had risen on average
14.8 percent per year, from 5,857,000 won (US$8,645 based on the
1989 exchange rate of US$1=677.5 won) to 8,863,000 won
(US$13,081). The Gini coefficient, a commonly used measure of
income distribution, dropped slightly from 0.3449 in 1985 to
0.3355 in 1988. The comparable figure stood at 0.285 in Japan in
1985 and at 0.364 in the United States in 1978.
As noted by David I. Steinberg, economic growth translated
into
fairly equitable income distribution when compared with other
nations experiencing similar development and its attendant
problems. When Park took office, approximately 40 percent of the
population lived below the poverty line; by the late 1980s, less
than 10 percent of the population lived under the poverty line,
although incomes at the top of the scale had increased faster
than those at the bottom. Salary increases had not been constant
under Park's regime because Park did not want high labor costs to
detract from the competitiveness of South Korean goods on the
international market. By late 1980s, capital-intensive higher
technology was more important. Further, although wages had
increased substantially in the late 1980s, this increase was not
because of the good will of the chaebol or the government,
but was the result of a great many strikes and a shortage of
skilled workers as industry expanded and large numbers of workers
moved to the Middle East to work on construction projects.
The purchasing power of the average citizen rose rapidly in
the 1980s. Real per capita GNP more than doubled between 1983 and
1988 (from US$1,914 to US$4,040) and was expected to reach
US$5,100 by 1991. South Korea was already transforming itself
into a durable consumer society. By the late 1980s, television
sets and refrigerators had become a standard part of the average
household, and ownership of an automobile was not unusual.
Families tended to consume more meat, fresh vegetables and fruit,
canned or processed foods, and to eat less rice than in previous
decades. They also dressed in modern fashions made from quality
fabrics.
Higher incomes led to significant shifts in consumption
patterns. For example, in 1963 the average family spent 57.4
percent of its budget on food. Twenty years later, the share
going to food had fallen to 40 percent and was expected to
continue to fall (but not as rapidly as in the past). Despite the
decreasing share of food in the consumer budget, the absolute
value of food consumed grew regularly in the 1970s and 1980s and
was expected to continue to do so in the 1990s. Rising incomes,
the increased mobility of the average person, and a high literacy
rate demonstrated evident socioeconomic progress.
Data as of June 1990
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