Perception of the Korean Middle Class: The Wide Gap Between Subjective Standards and Reality

Growing social anxiety and low coping capacity lead to high middle-class standards

Expanding social resilience is key to middle-class policy

The standards for the middle class that people perceive far exceed the living standards of actual middle-class households. Generally, households falling within 50% to 150% of the median income (3.33 million KRW per month based on total household income in 2007), which is the midpoint when all households are ranked by income, are classified as the actual middle class. Actual middle-class households had an average monthly income of only 3.11 million KRW, financial assets of 39 million KRW, real estate worth 190 million KRW, and a homeownership rate of 67.4%. To be considered middle class in Korea, one must have a monthly household income of 5.36 million KRW, financial assets averaging 380 million KRW, real estate worth 660 million KRW, own a home, and possess a car with an engine displacement of 2300cc or more.

The discrepancy between the perceived standard of the middle class and reality naturally leads to a low sense of belonging to the middle class. Among those who objectively belong to the middle class based on income (1.67 to 4.99 million KRW per month), as many as four out of ten (41.2%) underestimated their position, considering themselves lower class. Among those in the upper class with a monthly income exceeding 5 million KRW, only 4.8% identified as upper class, while 75% considered themselves middle class, and even 20.2% identified as lower class. Overall, there was a strong tendency to evaluate one's own social stratum lower than their objective position.

The higher perceived standard for the middle class than the actual situation appears to be driven by anxiety that current individual preparations or social safety nets are insufficient to cope with various social risks such as income reduction, old age, or job loss. Among the risk factors causing anxiety for the middle class, old age issues were cited by 70.5%, income/asset reduction by 67.5%, illness and health problems by 56.7%, and employment issues by 56.3%. The problem is that these risk factors are expected to worsen. When asked about anxiety factors in 10 years, middle-class respondents indicated concern about old age issues (80%), illness and health problems (75.5%), and income or asset reduction (74.4%), suggesting these problems are expected to persist long-term.

A different pattern emerges for middle-class households with children in elementary, middle, or high school. Child education is not only the biggest concern but also perceived as more serious than old age, employment, or income reduction issues compared to those without school-aged children. For middle-class families with students, child education was cited as an anxiety factor by 81.5%, followed by income/asset reduction (79.7%), old age issues (78.0%), and employment insecurity (63.9%).

These issues cannot be fully resolved by temporary government support policies or basic social safety nets. To strengthen the middle class, which forms the foundation of society, it is crucial to lift the poor into the middle class and simultaneously enable the precarious middle class, at risk of falling into poverty, to develop their own coping capabilities. While expanding the social safety net to guarantee a minimum standard of living for the poor and near-poor, and providing welfare support are important, the focus of middle-class policy should be on fostering social resilience, enabling individuals to cope with social risks independently. Reflecting their anxieties, a quarter of middle-class respondents stated that social security systems should prioritize the middle class.

[Table 1] Middle-Class Standards Perceived by the Public vs. Actual Middle-Class Status

[Figure 1] Discrepancy (%) Between Income-Based Class Classification and Subjective Class Consciousness

Note: Income classes are categorized based on the OECD's general classification criteria, where the middle class is defined as 50% to 150% of the median income for a 4-person household in 2007 (median total income: 3.33 million KRW per month, range: 1.67 to 4.49 million KRW). Below 50% is considered the poverty class, and above 150% is the upper class. (OECD uses disposable income, but this public opinion survey used total income.)

[Figure 2] Primary Anxiety Factors Faced by Individuals

Note: For each anxiety factor, the percentage is calculated by summing "Very Concerned" + "Generally Concerned".

Lee Sook-jong (President, EAI; Professor, Sungkyunkwan University, Department of Public Administration)