Government Launches Task Force to Address Economic Inequality

The government is launching a task force led by the Deputy Prime Minister to address economic inequality. This initiative comes amid concerns that growth driven by the semiconductor and information technology sectors is not sufficiently benefiting all segments of society, and that the transition to artificial intelligence (AI) could exacerbate existing disparities. The government plans to identify key tasks in five areas—labor market, industry, region, generation, and society—to be included in the '2027 Economic Growth Strategy' by the end of the year.

On November 11, the government announced its 'Direction for Addressing Inequality' during a meeting of economic ministers. The task force, led by the Deputy Prime Minister and including ministers from relevant departments and the head of the Economic and Social Research Institute, will begin its work on November 12.

The government diagnosed that while a growth strategy centered on large corporations and exports has driven high growth, the benefits have not adequately reached small businesses and vulnerable populations, leading to a widening gap in income and assets. Specifically, the semiconductor and IT industries have shown low job creation relative to their growth, limiting the positive effects of economic improvement on small businesses and traditional markets.

According to the 2024 input-output table, the employment generation coefficient for the computer and electronics industry is 2.87 jobs per 1 billion won in final demand, significantly lower than the industry average of 7.8 and the service sector's 9.5.

Disparities in the labor market and between generations are also increasing. The wage ratio of non-regular workers compared to regular workers in large companies decreased from 62.7% in 2016 to 61.1% in 2025. The net assets of households aged 60 and older are 2.14 times greater than those of households in their 30s, up from 1.47 times in 2020. South Korea's elderly income poverty rate stands at 39.7%, far exceeding the OECD average of 14.8%.

The government expressed concerns that the AI transition could widen productivity and labor market adaptability gaps across industries and regions, potentially accelerating inequality. This could lead to a 'K-shaped' polarization where the benefits of growth concentrate in specific sectors, making upward mobility for vulnerable groups more difficult.

In response, the government will develop policy tasks focused on alleviating disparities in the labor market, industry and enterprises, regions, generations, and society. Issues related to gaps arising from the AI transition will be examined within each area.

The approach will focus on restoring mobility between classes and alleviating downward pressure on vulnerable sectors. Instead of merely expanding support programs, the government aims to identify key tasks that address structural issues and provide concentrated support through finance, taxation, and regulatory improvements.

A notable example under consideration is a win-win agreement for the shipbuilding industry between primary and secondary contractors. The government plans to review and enhance existing agreements in the first half of next year and explore new agreements and support measures in response to the AI transition. Following this, it will also consider expanding successful measures to other sectors such as defense and automotive.

The task force will be operated by a steering committee co-led by the first vice ministers of the Ministry of Economy and Finance and the Ministry of Health and Welfare, along with five working groups focused on each area. Working groups will meet weekly, while the steering committee will convene at least twice a month. The steering committee will also monitor the progress of three major livelihood projects: housing, jobs, and financial support for low-income households.

By early next month, the government aims to discuss the direction of initiatives in each area and include agreed-upon key tasks in the '2027 Economic Growth Strategy' to be announced by the end of the year. Tasks requiring social consensus will undergo public discourse to refine implementation plans, and the task force will continue to operate into next year to monitor progress.