The article critiques South Korea's growth strategies under the Lee Jae-myung administration, arguing that existing plans do not address the underlying structural factors contributing to increasing inequality.
In the article, professor Yoon Hong-sik discusses various pathways to economic growth, highlighting the Lee Jae-myung government's approach of 'restoring people's livelihoods through growth' as potentially viable. However, he raises concerns about whether the developmental path taken during South Korea's past can be replicated in 2026, as growth does not inherently reduce inequality, particularly in the wake of neoliberal policies that have often led to greater economic disparities. The professor points out that the notion of 'good growth' often based on the trickle-down effect is largely theoretical and has seldom been realized in practice.
The article emphasizes that while absolute income levels have risen, the deepening relative inequality brings about significant social costs, eroding trust within society and fostering political polarization and populism. This dynamic, according to Yoon, poses fundamental threats to the stability of both democracy and the capitalist economy in Korea. He cites that since the early 1990s, economic growth in Korea has increasingly contributed to worsening inequality rather than alleviating it, particularly in light of the high capital intensity and import dependence of sectors like semiconductors in the IT industry, which have not translated effectively into broader employment opportunities or substantial growth in other sectors.
Moreover, the professor critiques the lack of a clear strategy to tackle the structural causes of rising inequality in the economic growth plan unveiled by the Lee government on January 9. He observes that the proposed strategy largely continues to rely on traditional growth lenses focused on large corporations, manufacturing, automation, and exports, thus possibly perpetuating existing inequalities without fundamentally addressing their root causes. Yoon warns that this approach may result in concentrated economic gains for the affluent while offering limited benefits for broader society, especially as high-income individuals tend to have lower marginal propensities to consume, restricting the potential for domestic consumption to drive broader economic growth.
