Social democratic moment?

By John Burton

Has the progressive wave that swept the left-wing Syriza party into power in Greece, elected Jeremy Corbyn as the leader of the British Labor Party, and supported the insurgency of Bernie Sanders as the U.S. Democratic Party presidential candidate reached Korea? That would appear to be the case based on the surprise victory of the opposition in the April 13 parliamentary elections.

For the first time in 16 years, the center-left has captured parliamentary control, possibly ushering in a new era of social democratic policy. Korea has only had one previous period of such rule during the presidencies of Kim Dae-Jung and Roh Moo-hyun between 1999 and 2009.

What delivered parliament to the Minjoo and People's parties was a groundswell of support among those between their 20s and 40s who are angry about growing income inequality and youth unemployment. These are the same factors behind the rise of Syriza, Corbyn and Sanders.

Despite the strong role of the state in postwar Korea that began with the dictatorship of Park Chung-hee, the government has done relatively little in fostering a secure social safety net as it concentrated on the country's industrialization and related infrastructure building, which primarily benefited the growth of the chaebol.

But two factors now favor a populist push toward social reforms. One is the slowing economy, which is taking its toll on the highly-indebted middle class. The other is that Korea is in better shape than its counterparts in Europe and the U.S. to finance an expansion of social services since the government debt is among the lowest in the OECD, the club of rich nations, at around 40 percent of gross domestic product. An explosive increase rise in the number of the elderly is likely to add pressure to increase social spending in the years ahead.

Korea ranks at or near the bottom among OECD countries in social welfare spending, with a ratio to GDP of 10.4 percent , which is less than half the OECD average of 21.6 percent. The biggest spurt of growth in social welfare spending came during the first decade of the 21st century under Presidents Kim and Roh, when the ratio of welfare expenditure to GDP rose from 4.8 percent in 2000 to 9 percent in 2010.

There are several reasons why social spending has remained relatively low. One is that individual tax rates are also low compared to other advanced countries. The lack of a strong union movement outside of the main chaebol means that there has never been a strong organized push for improved social benefits as occurred in Europe or U.S. Moreover, the unions representing chaebol workers have tended to look after their own interests instead of the general workforce. Meanwhile, white-collar workers have been less militant in demanding social reforms then blue-collar ones. Finally, there remains deep suspicion about progressive causes, a legacy of Seoul's conflict with communist North Korea.

The social welfare budget, which amounted to 115 trillion won last year, is also lopsided in favor of social insurance spending, such as health insurance and public pensions, rather programs directly aiding the poor and disadvantaged, particularly the elderly.

Unfortunately, the center-left parties have not yet produced a coherent social welfare program of their own, except for making vague promises during the election campaign or offering small-bore proposals such as paying unemployed youth a small stipend as they search for work.

Instead, it is several liberal mayors that appear to be leading the way with a mixture of pragmatism and innovative policy. Lee Jae-myung, the mayor of the affluent Seoul suburb of Seongnam, for example, has promoted free postnatal care for new mothers, free school uniforms, and spending vouchers for recent university graduates who are unemployed. He is financing the programs by cutting budget spending on other items and cracking down on government corruption, while also supported by a relatively high property tax base.

Seoul Mayor Park Won-soon is pushing similar policies, while addressing the needs of low-income young people by promoting the use of "sharing economy" programs that provide cars and housing for them.

AhnCheol-soo, the leader of the People's Party, has also shown a preference for relying on his business experience as a software entrepreneur to deal with social issues. The fact that his party holds the balance of power in the National Assembly could prove crucial in promoting some of these ideas on the national level.

One hopeful result of the parliamentary elections was that it indicated an apparent breakdown of traditional voting patterns, with Korea heading for a three-party system. That bodes well for the creation of a new multifaceted and pluralistic voting coalition that could support the introduction of expanded social welfare measures as long as they deliver results.

John Burton, a former Korea correspondent for the Financial Times, is now a Seoul-based independent journalist and media consultant. He can be reached at johnburtonft@yahoo.com.