“After paying rent, insurance premiums, and utility bills, there really isn’t much left. Prices are rising and salaries are the same, but who on earth receives $40,000 in national income?”
Mr. Choi (34), an office worker who lives alone and works for a small business in Seoul, responded as follows on the 25th when he was told that the gross national income (GNI) per capita was approaching $40,000.
As corporate operating profits increase, especially in the semiconductor manufacturing industry, there is a growing possibility that gross national income per capita will exceed $40,000 this year. However, as prices continue to rise, the quality of living felt by citizens is the exact opposite of the indicator.
Jimo (23), a college student attending college in Seoul, also said, "If you look around, the number of people who have successfully found a job has decreased significantly compared to a year or two ago. There is almost no public recruitment by companies, and as the use of AI (artificial intelligence) increases, I feel that jobs themselves are disappearing."
Kim (42), a housewife with two children in elementary school, expressed her anger by saying, "After paying for food and the children's school fees, I don't even have enough money to save. Who is making the money? Aren't only people who work for large semiconductor companies wasting money?"
◇ Numbers created by semiconductor exports… Performance is not distributed properly
Experts agree that the per capita gross national income of $40,000 is due to the boom in the semiconductor industry.
However, because the Korean economy relies on a single industry, it is difficult to sustain growth momentum.
Kim Jeong-sik, professor emeritus of economics at Yonsei University, explained, “Because exports are concentrated in semiconductors, if semiconductors fail, the Korean economy will inevitably collapse as well,” adding, “Rather, the concentrated export structure is a factor that increases anxiety about the Korean economy.”
Yoon Hong-sik, a professor of social welfare at Inha University, also pointed out, "The Korean economy has a structure in which large-scale investments in facilities, whether in the shipbuilding industry, automobiles, or semiconductors, and the products produced through automation are sold overseas rather than domestically. It is growing by putting all its eggs in one basket."
In civil society, it was pointed out that the results were concentrated in a few industries and were not distributed properly.
Kim Eun-jeong, secretary-general of the People's Solidarity for Participatory Democracy, said, "It is difficult to say that our economy has improved overall just based on improved indicators. The current growth is largely driven by the boom in semiconductors and some high-tech industries, and it is difficult to say that the results are being sufficiently translated into the lives of households."
While the semiconductor industry is growing, the number of jobs is decreasing as the use of AI spreads. Concerns have also been raised that polarization and inequality will deepen as youth employment declines.
Seok Jae-eun, a social welfare professor at Hallym University, said, "$40,000 will be distributed mainly to people participating in key industries, but there are many groups who cannot participate at all." He added, "Youth and the unstable working class are being pushed out of employment."
Professor Yoon also said, “Semiconductors are an industry that can create about two jobs by investing 1 billion won, and most industries in Korea are replacing skilled workers with automation,” adding, “It is difficult to achieve growth for everyone in this structure.”
There is also an analysis that the use of AI will push children from low-income families out of education and increase wealth polarization.
Park Nam-gi, professor emeritus of the Department of Education at Gwangju National University of Education, said, “AI is said to have the effect of increasing the educational gap 10 times compared to the past,” and added, “If parents are not targeted for education, children from poor families will be neglected and all education will be left to AI, making it impossible for children to study properly.”
◇ $40,000 based on one semiconductor… “Need to foster new industries and improve industrial competitiveness”
Experts commonly point out that in order to maintain the per capita gross national income exceeding $40,000, we must move away from relying solely on the semiconductor industry.
The point is that we need to prepare for a decline in the semiconductor industry by increasing the competitiveness of other industries.
Kim Jeong-sik, professor emeritus of economics at Yonsei University, said, “Except for semiconductors, the competitiveness of industries such as steel, shipbuilding, automobiles, and petrochemicals are losing ground to China,” and added, “Jobs in these industries are not being created and the industries themselves are declining.”
He advised, “In the past, we hired a lot of college students in the shipbuilding industry, but now we don’t, so young people can’t get jobs. We need to increase the competitiveness of industries that lag behind China by fostering new industries to create jobs.”
Hongsik Yoon, a professor of social welfare at Inha University, said, “There must be a fundamental question about whether we will continue to grow in a way that relies solely on large export companies. We need to diversify the growth engines not only into manufacturing but also into the service industry and social services.”
Professor Yoon added, “In this way, good jobs can be created and the fruits of growth can be distributed equally to everyone.”
Apart from industrial restructuring, there were also suggestions that the mechanism for transferring the $40,000 performance to society should also be modified.
Tax and welfare systems were singled out as targets.
Kang Byeong-gu, a professor of economics at Inha University, said, “The AI industry is making products using data provided by general consumers and has a strong social nature because it has received large-scale tax support from the government. We need a mechanism to return the excess profits from it to society to a certain extent.”
Kim Eun-jeong, director of the People's Solidarity for Participatory Democracy, also emphasized, "Rather than relying on an increase in tax revenue due to the semiconductor boom, large corporations and the high-income/high-asset class should share responsibilities according to their ability to bear the burden and link this to welfare. It is also the role of the government to explain to citizens the need for fair taxation and redistribution and to create social consent."
Seok Jae-eun, a professor of social welfare at Hallym University, said, "It is a system where social security resources were based on labor income, but if the job landscape becomes vulnerable due to AI, social security resources may also decrease. We need a way to diversify the base of insurance premiums or social security resources, such as imposing a tax on financial income."
There were also calls to strengthen income security by life cycle for some classes, such as young people and the elderly.
Professor Seok said, “As the basic pension is a system that can effectively respond to poverty among the elderly, the distribution should be changed to a lower-low-low-low-low-low-income system so that the basic pension can go to more vulnerable groups.” He added, “As AI and other technologies change the job landscape and some jobs are disappearing, it is also necessary to design income security for youth.”
There was also advice that the safety net should be expanded for those excluded from growth.
Yoon Hong-sik, a professor of social welfare at Inha University, said, "Korea's social insurance is based on employment relationships, so people who are underemployed, such as small self-employed people or irregular workers, are excluded," and added, "There is a need to relax supply and demand conditions such as standards for dependents and property standards so that benefits can actually be provided to the poor."
