[Reporter’s Notebook] Disaster Relief Funds Fail to Target... 'Blind Spots' Must Be Properly Addressed

[Asia Economy Reporter Son Sunhee] The fourth-quarter household trend survey, which reflected the second round of disaster relief funds selectively provided to COVID-19 affected groups last year, was announced on the 18th. However, a strange point stands out. Looking at the increase in 'public transfer income,' which includes disaster relief funds (social benefits), the middle class saw a greater increase than the most vulnerable low-income group (1st quintile).

Households in the 1st quintile, with an average monthly income of only 1.64 million KRW, saw their public transfer income increase by just 17.1% compared to the same period last year. Meanwhile, households in the 4th quintile, with an average monthly income of 6.23 million KRW, experienced a 33.6% increase. By rate of increase, the order is 4th quintile (33.6%) → 3rd quintile (26.5%) → 2nd quintile (25.0%) → 1st quintile (17.1%) → 5th quintile (11.7%).

Of course, the absolute amount of public transfer income is naturally higher for the 1st quintile, which is in a more difficult household situation. However, considering the difference in growth rates compared to last year, there remains a question as to whether the effect of the disaster relief funds, which the government claimed were 'selectively provided' using taxpayers' money, appeared in unexpected places.

Although the funds were selectively provided to affected groups, they were insufficient to offset the difficulties faced by the lowest tier who lost their jobs and were pushed to the margins. With earned income for 1st quintile households decreasing by 13.6%, the '5-quintile ratio,' an indicator of income distribution, also worsened compared to the same period last year. The employment disaster ultimately led to income deterioration, and the temporary fiscal support had minimal effect. This is why both the Blue House, which promoted the creation of a 'job dashboard,' and the confident economic advisors advocating 'income-led growth theory' must feel embarrassed before the public.

The ruling party and government are preparing another 'selective' disaster relief fund. However, there is suspicion that this selectivity might be influenced by the upcoming April by-elections, catering only to self-employed and small business owners, who have traditionally been considered the ruling party's 'vote base.' Disaster relief funds paid with taxpayers' money should not follow political logic. The principle of 'supporting the lower tiers more than the upper tiers' must be strictly observed and implemented more precisely. Eliminating blind spots for the most vulnerable lowest tier should be the top priority.

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