A class above all others

2022. 6. 27. 20:05
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'The most perfect political community is one in which the middle class is in control.'

Jeong Jae-hongThe author is an international affairs and security editor of the JoongAng Ilbo.

Gustavo Petro was elected president of Colombia on June 19. According to an analysis in the Washington Post, Columbia, ruled by right-wing politicians over 200 years, elected a left-wing president because the middle-class collapsed due to the Covid-19 pandemic and voters wanted the government to ease economic inequality.

Brazil is scheduled to have a presidential election on October 2, and leftist former president Luiz Inácio Lula da Silva, commonly known as Lula, is getting over 50 percent of support. In addition to Mexico, Argentine, Chile, Peru and Columbia, another left-wing administration is about to launch in Brazil, too

The left-wing wave in Latin America largely resulted from right-wing administrations’ failure to cope with the pandemic and the collapse of the middle class in the region.

The middle class is the bastion of democracy. A country with a strong middle class has stable politics and an energetic economy. Northern European countries such as Germany, Sweden, Norway and Finland are examples. But the shrinking of the middle class widens the wealth gap and splits a society. Most Latin American countries, including Colombia, are suffering from perennial political and economic instabilities because their middle classes are not sound.

Policies that allow the top class to control profits fuel the wealth gap, while policies focusing on supporting the poor shake the fiscal balance and hinder economic growth. “The most perfect political community is one in which the middle class is in control, and outnumbers both of the other classes,” said Aristotle.

Korea was a society where the fruits of economic growth were distributed relatively equally. Since its independence after World War II, the country has achieved a rare success of both economic growth and democratization thanks to the support of a firm middle class. The middle class wants not only an inclusive economy where the fruits of the growth are distributed fairly, but inclusive politics where their voices are reflected.

Korea recorded $35,000 per capita GDP last year, becoming a member of the Organization for Economic Cooperation and Development (OECD). Since the direct presidential election was introduced with a constitutional amendment in 1987, the country also developed as a dynamic democracy, where the right-wing and the left-wing peacefully transfered power.

The middle class of Korea, which sustained the development of the country, has been shrinking since the 1997 Asian financial crisis. The OCED defines the middle-income class as households with income between 75% and 200% of the median national income.

According to that definition, over 70 percent of Korean households belonged to the middle-income class before the 1997 crisis, but that share dropped to 60 percent. During the 1997 crisis, flexibility of the labor market was increased to help get a loan from the International Monetary Fund (IMF), and non-salaried workers were increased as a result, thus shrinking the middle class.

According to Statistics Korea and the Korea Labor Institute, the number of non-salaried contract workers was 8.067 million as of last August, exceeding the 8 million-mark for the first time since 2003.

Among wage workers, 38.4 percent are non-salaried workers, the highest ever. That’s because businesses shut down and temporary workers such as delivery workers increased sharply due to the pandemic.

According to a Gallup Korea poll in 1989, 75 percent of the people between the ages of 20 and 60 thought they were middle class. But in a Korea Economic Daily survey in February, only 53 percent considered themselves middle class.

In Korea, there is a perception that a middle class household has over 5 million won ($3,900) of monthly income for a family of four and owns an apartment over 1,068 square-feet and a mid-size sedan. Due to skyrocketing housing prices, home ownership became difficult, and the self-employed shut down their businesses. Youngsters who cannot afford a home take out loans to invest in cryptocurrency and stock markets, often facing enormous losses.

In Sweden, which has a great welfare system, 65.2 percent are middle class, but in the United States, where neoliberalism has a great impact, 51.2 percent are defined as middle class.

On June 20, President Yoon Suk-yeol told reporters, “I am doing my best to stabilize prices for the middle class and ordinary people.” The government must put priority on policies that minimize pain to the middle class and will offer them quality jobs.

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