Álvaro J. de Regil

South Korea followed a tortuous yet keenly distinctive road to achieve sustained growth and drastically reduce inequality. What did it do differently from other countries? It eschewed the now discredited mantra of the Washington Consensus, to grow with a good degree of equity. Yet, the market’s unrelenting necessity for sheer consumerism is now generating such inequality that it demands from Korea and everywhere the urgent need of
replacing it for being absolutely unsustainable

This paper is divided in three parts. The first examines the development path followed by Korea since the end of its war, with a relative emphasis on the travails of its labour force to achieve a dignified share of the income generated. The second part addresses the question of what Korea has done differently from other developing countries, particularly in Iberian America and with special emphasis on Mexico, given the dramatic differences in economic policies and considering that Mexico was far ahead of Korea half a century ago. The final part assesses in particular the trend followed by the labour compensations in the manufacturing sector for production-line workers from 1975 to 2009 and for all Koreans employed in the manufacturing sector from 1996 to 2012, in the context of our The Living Wages North and South Initiative (TLWNSI). Given that in this context Korea has been able to drastically reduce its living-wage gap with the US, this paper also provides a projection of the time required for Korea to achieve full living-wage equalisation, if real wages are increased at the annual rates of 4% under concrete assumptions.

It goes without saying that TLWNSI is conceived in the context of the current and inherently unsustainable market-driven paradigm. It is an idea developed to expose the prevalent labour exploitation and to advocate a concrete methodology to address this issue in a practical way. It is a concept valid only as long as most governments in the world continue to act as market agents on behalf of the international institutional investors instead of as public servants in pursuit of the welfare of their peoples. Consequently, the future of Korea´s welfare as well as that of all countries, requires, whether we like it or not, a radical change of paradigm. In the new paradigm, classic indicators such as the GDP economic growth cease to have meaning and are replaced by indicators of human development with a stationary economy with a good quality of life but clearly lacking the sheer consumerism of today. It is the paradigm for the welfare of people and planet and NOT the market. It is a paradigm that will only be possible if we replace the current mockery of representative democracy, a euphemism for marketocracy, with an ethos of true democracy for the long-term sustainability of people and planet, and NOT the market.

Assessment prepared on in October 2013. For a full review of this paper, click here or on the picture to download the pdf file.




Economic analysis relevant to TLWNSI...
   Site Map
   Contact us
HomeResourcesEconomic DataSouth Korea's Tortuous Road
Bookmark and Share