Precarious Work, the Middle Class and the Risk of Poverty in South Korea
Hyojin Jang and Huck-ju Kwon (Seoul National University)
Korea’s rapid economic recovery in 1999-2000 was hailed as a great success, but the subsequent reforms have changed the labour market dynamics which have then gradually deteriorated quality of life at the level of individuals and households. The structural reform, which to some extent stabilized the Korean economy, resulted in the drastic growth of non-regular workers, low-wage workers and the unemployed. In consequence, it is believed that a great deal of household lost the middle class status. Does the reform for flexible labour market produce the working poor in Korea? The paper aims to examine the relationship between precarious work and the risk of poverty. We will also trace the diminishing size of the middle class.
Low-wage and non-regular employment historically emerged as introducing flexibility in the labour market for the purpose of reducing high and persistent unemployment. However, its impact on overall unemployment is ambiguous and it is blamed for increasing the level of economic insecurity and the risk of poverty. Thus, a number of researches use the concept ‘precarious work’ to indicate uncertain, insecure and poor work conditions and point out it is often coincided with social problems such as poverty and social exclusion. Yet, the linkage between the characteristics of precarious jobs and poverty is not sufficiently investigated.
This article explores the characteristics of labour market in Korea and examines the causal relationship between household head’s employment status and the likelihood of the middle class status, and the risk of poverty at the household level. Implications of this research can be extended to other countries which share similar labor market characteristics with Korea.