Hong Nam-gi "Seriously Acknowledge the Worsening Income Distribution Situation"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyunjung] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated that he is seriously aware of the situation where income distribution has worsened for two consecutive quarters amid the COVID-19 pandemic.

On the 18th, Deputy Prime Minister Hong presided over a meeting of related ministers (Green Room Meeting) at the Government Seoul Office and made these remarks while reviewing the income distribution situation based on the '2020 4th Quarter Household Trends Survey.'

At the meeting, attendees including the Minister of Employment and Labor, Director of the Office for Government Policy Coordination, Commissioner of Statistics Korea, and 1st Vice Minister of Health and Welfare analyzed that in the 4th quarter of last year, the income growth rate of the 1st quintile (1.7%) was surpassed by that of the 5th quintile (2.7%), resulting in a 5th quintile ratio of 4.72 times, which increased by 0.08 percentage points compared to the previous year, although the rate of increase slowed compared to the 3rd quarter.

However, Deputy Prime Minister Hong evaluated, "Compared to the 3rd quarter, it is fortunate that all quintiles showed income growth, including the turnaround in income increase for the 1st quintile, and that the worsening of distribution has eased."

Regarding the fact that business income decreased by 54,000 KRW year-on-year due to damages to self-employed individuals caused by COVID-19, but public transfer income received from the government increased by 77,000 KRW, he diagnosed that "the government's active support, including the 4th supplementary budget, has supplemented the difficulties of the affected groups and mitigated the worsening of distribution."

Deputy Prime Minister Hong emphasized, "While continuing and strengthening efforts to support vulnerable industries and groups affected by COVID-19, it is necessary to focus policy capabilities on 'inclusive recovery' to prevent polarization from becoming entrenched after the crisis," adding, "We will expedite the preparation of a supplementary budget plan to promptly complete the existing support for affected groups and to provide 'broader and deeper support' to them."

Furthermore, he stated, "We will also strengthen efforts to support employment for vulnerable groups and improve the private sector job situation," emphasizing, "Through early execution of direct jobs (1.04 million annually by the central government), we will swiftly provide 900,000+ direct jobs by the central and local governments in the first quarter." He continued, "We will comprehensively support private sector job creation and retention through the rapid promotion of investment projects worth 110 trillion KRW by corporations, private capital, and the public sector, as well as additional expansion of employment retention support," and stressed, "We will also steadily implement institutional improvements to strengthen welfare and social safety nets, such as expanding employment and industrial accident insurance coverage, stabilizing the National Employment Support System, and abolishing the support obligation criteria for basic livelihood security benefits."

This content was produced with the assistance of AI translation services.