Session 4. Tasks for Inclusive Welfare State in the Era of Transformation
Presentation 2. The Role of Employment and Social Policy in Achieving an Equal Society
KANG Shin-Wook 　Senior Research Fellow, Korea Institute for Health and Social Affairs
HONG Minki 　Senior Research Fellow, Korea Labor Institute

□ Income inequality in Korea, its characteristics, and factors for its aggravation
 
○ Over time, income inequality has risen in Korea. Income redistribution policies have been increasingly implemented, but not to an extent to offset the aggravating consequences of market-based distribution.
 
○ One of the marked features of long-term income inequality is that income has stagnated for low-income groups.
 
○ The presence of the large number of low-wage workers is attributable to several factors including: the dwindling bargaining power of workers in the labor market (structural factor); the strong control that large firms have over small- and medium-scale firms (market factor); and the widespread indirect employment and increased employment of non-regular workers in pursuit of a flexible labor market after the 1997 financial crisis (policy factor).
 
○ Curbing the increasing income inequality would require adequate policy responses to market-based income distribution. Labor market policies and social welfare programs should be strengthened and their roles should be defined in a way to ensure their complementarity and mutual reinforcement.
 
□ Challenges for employment and social welfare policies
 
○ At such a time as this, when low-wage employment persists and disparities widen between large firms and small and midsized ones and between regular and non-regular workers, it is essential to take policy steps to reduce wage inequality.
 
○ The policy options that may be considered include minimum wage hikes, promotion of fair subcontracting and franchising practices, and strengthening the representation of interests of non-regular workers, small- and medium-scale enterprise employees, and small-scale employers.
 
○ Also, Korea’s income security programs need to set their mid- and long-term targets and establish indicators accordingly, and work toward meeting the targets over a 5-year period, 10-year period, and beyond.