South Korea's per capita gross national income (GNI) is projected to surpass $40,000 for the first time this year. However, experts caution that this does not necessarily indicate an improvement in the standard of living for citizens. The surge in income is largely attributed to a boom in the semiconductor industry and a strong won, but disparities among industries, regions, and generations may widen as a result.
According to a report by Aju Economy on September 10, experts believe the likelihood of achieving a $40,000 per capita GNI is high. However, they point out that the growth driven primarily by semiconductors and currency effects has limitations in enhancing the income levels that citizens actually feel.
Excluding semiconductors, major manufacturing sectors such as automotive and petrochemicals are experiencing relative sluggishness, which could exacerbate growth disparities among industries. Additionally, fluctuations in the exchange rate can affect the per capita income level and ranking, making it difficult to assess improvements in the economic structure based solely on dollar-denominated indicators.
Kim Jeong-sik, an emeritus professor of economics at Yonsei University, stated, "As semiconductor exports expand, the Bank of Korea has raised its current account surplus forecast to $450 billion and has also increased its economic growth outlook. With the exchange rate declining, achieving a $40,000 per capita income seems feasible." He emphasized the need to bolster competitiveness in industries beyond semiconductors to create jobs, particularly highlighting the urgent need to stimulate the construction sector, which is closely linked to domestic demand.
Concerns have also been raised that disparities among industries could lead to regional and asset polarization. In the capital region, where semiconductor companies are concentrated, increased income and employment may stimulate housing demand, but other regions are less likely to benefit from such effects.
Jeong Se-eun, a professor of economics at Chungnam National University, noted, "While areas around Samsung Electronics and SK Hynix may experience economic revitalization and rising housing prices, the resulting asset gap could lead to industrial and job polarization. Considering the possibility of a sharp downturn in the semiconductor market next year, it is crucial to devise ways to distribute the fruits of growth to other industries and regions."
Addressing youth employment is also highlighted as a key policy challenge. Jeong expressed concern that with declining employment rates among young people and the transition to artificial intelligence (AI) potentially reducing existing jobs, the uncertainty surrounding the creation of new jobs could have long-term negative implications for the overall economy.
Inflation concerns further complicate the positive assessment of achieving a $40,000 per capita GNI. Prolonged high prices may limit improvements in real purchasing power despite nominal income increases. Particularly, if both the price and real estate markets become unstable simultaneously, fiscal stimulus through government spending could inadvertently stimulate demand.
There are calls to examine indicators related to income distribution alongside per capita income figures. Kim Sang-bong, a professor of economics at Hansung University, remarked, "Per capita income does not reflect the distribution of income. If $40,000 translates to approximately 60 million won, how many households earn 240 million won for a family of four?" He added that due to exchange rate influences, the figure of $40,000 should not be overemphasized.
* This article has been translated by AI.
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