POVERTY IS society’s chronic disease. Once dragged in, it is nearly inescapable. And this is especially true in South Korea. Recent news reports that it is becoming increasingly difficult for Korea’s poor to rise above the poverty line, only to be left with the desperation of their circumstances.
What it means to be poor
“Yonhap News” reported in mid-February that Korea’s poverty exit rate (the percentage of people escaping the poverty class) has been steadily declining. Between 2005 and 2006, the rate of people being lifted out of poverty was at 32.6%, but dropped down to 28.8% between 2008 and 2009, and has been continually falling since. On the other hand, the number of people falling into poverty has been increasing. According to the Ministry of Strategy and Finance, the Korean government’s definition of “poverty class” is those who cannot or do not earn the minimum cost of living. The minimum cost of living was last set in 2009, with the national minimum to be \490,845 for an individual, \835,763 for a family of two, \1,081,186 for a family of three, and \1,326,609 for a family of four.
The present circumstances
Though the issue of the poverty trap has always existed, it continues to plague society today. This is because of a blend of problems, according to Yang Jae-jin (Prof., Dept. of Public Admin.). Getting a stable job is nearly impossible for the impoverished who fall behind in working abilities (due to their being unable to afford education) compared to everyone else. “The ailing economy means that public assistance programs and national basic livelihood security systems are unable to provide these impoverished households with adequate support,” he says. Because of their economic situation, many of the impoverished have come to adopt the attitude of deliberately earning little to stay impoverished and live off the welfare the government provides. “They end up seeing this as the more practical option, because, in the current situation, it is nearly impossible to find employment. And whatever jobs are available, the wages that come along with them are simply not a big enough motivation for the impoverished to stay at those jobs,” says Yang.
Choi Jae-sung (Prof., The Graduate School of Social Welfare) says that the polarization of income becoming more severe forces the impoverished to stay poor. “Social mobility becomes extremely limited,” he says. “The opportunities of poverty exit are increasingly scarce because the wealth gap that the impoverished have to overcome gets wider and wider as time passes.” But the biggest problem is the fact that poverty is repeated from generation to generation. “What we call a ‘poverty culture’ is created,” says Choi. “The impoverished ends up passing down their chains to their descendants. The kids inherit the same tendencies and the impoverished stays as the impoverished perpetually.”
So what has the government sent forth to battle this problem? Yang says that the programs in place have been extremely limited, and until now, public support in the form of financial subsidies for basic living has been the only notable measure. However, several other policies to alleviate the situation were set forth, all of which were not particularly fruitful. The first was relieving financial burdens regarding education through tax-based public assistance programs. For example, the Dreamstart program helps children from impoverished families get the same educational opportunities as those who are not impoverished. “Another significant government measure was to induce the poverty class to build assets, by giving benefits to the impoverished in creating savings,” says Yang. The government created incentives to encourage the impoverished to save for the future by providing generous and advantageous savings deals.
The main cause for the persistence of these problems, despite such government actions, the government’s definition of the “impoverished,” is the main cause of the problem. Up to this point, the government has defined “poverty class” as those whose incomes are 100~120% of the minimum income, as opposed to other OECD nations that derive their impoverished class from the median income and therefore make the concept relative rather than absolute. “So legally, only between 5~7% are impoverished in our country,” says Choi. But that—the very way of categorizing who is in the poverty class—is the root of the problem. “Those whose incomes are just above the cutoff line are unable to receive support from the government, although they need it just as much as those whose incomes fall under the national minimum. And those people are forced to stay impoverished,” says Yang. So in fact, “about 20~25% of the population should be seen as realistically impoverished,” according to Choi. Yet the policy in place makes it so that only those who are below that poverty line receive government subsidies. “This seems unfair,” says Yang.
Re-drawing the lines: a new approach
Park Geun-hye’s Presidential Transition Committee has stated that it will redefine the definition of “impoverished” from the current concept of “absolute poverty” to “relative poverty.” Escaping from the original definition of “impoverished”, now the government will regard those whose incomes are 50% and below of the median income as impoverished. The previous method unrealistically depicts the impoverished. With this procedure, the number of people that fall under the poverty class almost doubles to 2.9 million from the 2010 standard of 1.7 million people, according to “Yonhap News.”
The Park Administration also announced that it would seek ways to provide as much support to all of these families in the most efficient ways possible. The government has been providing subsidy packages to members of the poverty class for basic living, housing, education, medical expenses, funeral expenses, childbirth accommodation, and rehabilitation resources. But the Park Administration tentatively plans to selectively grant these subsidies after evaluating the work potential and individual circumstances of each recipient, and thereafter allot only the applicable subsidies from the seven categories. This way, the government is able to widen the number of recipients and distribute the support efficiently.
However, subsidies alone cannot solve the situation according to Choi. The most fundamental approach is increasing the social capital of the impoverished class. “It takes a certain amount of resources to be able to move upward in social class,” says Choi. “You need connections, stellar education, degrees after degrees, information, and these things—the term for which is social capital—are not easy to acquire; the standards for success have skyrocketed.” For those who cannot afford them or have nowhere to turn to obtain them, social capital requirements are an immense and unaffordable obstacle. The impoverished people face cutthroat competition with which they just cannot keep up. “Without social capital, the impoverished will still end up being alienated. Because they are so polarized from resources that are necessary to thrive, they fall back upon poverty. This is the fundamental problem that the government must seek to solve.”
Yang says that there are several other ways that the problem can be remedied. Asserting that mere subsidization is ineffective, Yang says that the most obvious solution is to create stable jobs and incentives for the poverty class to work. “Welfare policies should revolve around keeping the impoverished employed,” says Yang. “For example, the government could reward the firms that employ members of the impoverished class who lag behind in working skills.” He also added, “The government must find ways to provide education that helps them realize the actuality of their situation, as well as teach them the most practical way to exit out of it.”
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The sad truth is that there will always be poor people, says Yang. History has shown that poverty is extremely hard to eradicate, and this fact still remains true today. The solutions that we have rendered thus far seem to only have perpetuated the problem, but that is not to say we should stop trying. “We must remember that tackling poverty is a collective responsibility, and that the duty does not fall to one person but rather to society as a whole,” says Choi. “Also, Yonsei students should be the leaders in instigating change and raising awareness of the issue.” The truth is that we cannot make things better for everyone. But perhaps the right way to go about the problem is to reflect on practical measures that aim to free as many people from poverty as our ability will allow.