South Korean Cultural Ecology - 1905 to 1990
Part 4 - Pollution and the Future -- Page 33

H. The Poor, Inequality, and Economic Justice

Absolute poverty has sharply declined from 23.4% in 1970 to 5.5% in 1988. The rates are spread evenly in the urban and rural areas. The people in the poverty category are mainly the old, the sick, those with disabilities, families without a male head of household, and in rural areas, those without land. This group receives a minimal "survival assistance" from the government. Female-headed households make up 31% of poor households. Most poor people in 1978 did not blame the system, but believed that they were either unlucky or that they were personally responsible for their misfortune. After 10 years of increasing attacks on the political and economic system by the radical students and the media, attitudes have changed. The perception is, regardless of economic facts, that the distribution of wealth is badly skewed and unjust. The 26 years of building resentment and frustration is now being expressed, not only in the form of opposition to authority, but also in the form of extreme sensitivity to what is regarded as the unfair allocation of rewards. It is the answer to what was known as the "sacrifice for the national good" and "promote growth first and redistribute later." "Later" is now, say the people.

The government has attempted to partially breakup the chaebols, requiring them to go public with their stock and spin off some of their subsidiary companies, paring them down to 3 main companies. See page 11 for the corporate structure of Lucky-Goldstar, one of the big five chaebols. The chaebols have resisted strenuously and not much has been done. The chaebols very much control the government perhaps more than the government controls them. Corruption has been rampant between the chaebols and sectors of the government, particularly at the highest levels.

Korean industrial structure has been based on the Confucianist model. Korean firms were managed from the top down and there was no discussion or criticism because the Confucianism way gave power to seniors and demanded acceptance of established practices. This strong power made possible the success of Korean industry since the end of the Korean War. Foreign firms brought new ideas and new management techniques and contributed to the dissatisfaction of older Korean managers. Salary increases were attempted to offset union demands but this was not matched by production increases. Finally Korean industrial groups realized that they needed to modify management philosophy itself. The rigid system of seniority was replaced with more emphasis to individual performance and then to accommodate the inflow of young talents returning from overseas studies that didn't fit into the old Confucian system (Lucky-Goldstar Monthly Bulletin January 1993).