As the KOSPI stock index continues to set record highs, a report suggests that the government's stock market stimulus policies could intensify the ongoing polarization between labor and capital income in South Korea. Based on the January employment trends, which showed a modest increase in employment of just 108,000 individuals over the previous month, economists express concern over the disconnect between financial market exuberance and the underlying economic realities. The report emphasizes a global pattern of increasing capital investments leading to economic polarization, referencing that this is not solely an American issue but a worldwide phenomenon influenced by the pandemic aftermath.

The economist from IBK Investment & Securities highlighted two key indicators: the labor income distribution rate and the capital income distribution rate. The labor income distribution rate has dropped sharply since 2020, while the capital income distribution rate has been on a pronounced rise. This structural shift reflects a cessation of the globalization paradigm post-COVID-19, with nations increasingly gearing up for future investments despite the absence of a new established paradigm. Anticipations of AI's effect on labor and capital flows may further accelerate this trend of polarization between income sources.

Despite growing concerns over worsening inequality, the economist remains skeptical about the government's ability to implement robust policies that could alter this trajectory. Historically, periods of rising labor income distribution have coincided with stock market downturns, suggesting that the current policies supporting stock prices could clash with the interests of labor income. Therefore, the government's focus on stock market stimulation may inadvertently favor capital income distribution, potentially undermining the labor income share—an outcome that the administration would likely not intend.