Government Activates Whole-of-Government TF to Address Polarization, Tackle Gaps in Five Areas Including Labor, Industry and Regions

Action Plan for Addressing Polarization to Bring About a Major Transition Toward Growth for All

The government will activate a whole-of-government response system to address polarization across the labor market, industries, regions, and generations. It will establish a task force (TF) directly overseen by the Deputy Prime Minister for Economic Affairs to closely examine structural problems in five key areas, including the labor market's dual structure, disparities between companies, concentration in the Seoul metropolitan area, and inequality between generations. Rather than simply expanding support programs, the government plans to focus its policy efforts on strengthening the foundations for self-reliance among vulnerable groups and restoring economic mobility.

On November 11, the Ministry of Finance and Economy and other relevant ministries announced the "Action Plan for Addressing Polarization to Bring About a Major Transition Toward Growth for All" at an Emergency Economic Ministers' Meeting held at the Government Complex Seoul. The government will immediately activate an overall response team and plans to flesh out action plans for each of the five areas by early December.

Deputy Prime Minister and Minister of Finance and Economy Lee Hyungil speaks at a joint meeting of the Emergency Economic Headquarters, economic ministers, and the Service Industry Development Task Force at the Government Complex Seoul in Jongno-gu, Seoul, on Oct. 14, 2026. Photo by Jo Yongjun

The government identified several causes of polarization: wage disparities between companies that have accumulated during growth led by large companies and exports; asset inequality resulting from the growth of asset markets, including real estate and stocks; and widening gaps between generations as the population ages. It also assessed that new forms of labor market disparities are deepening, with more workers left without adequate employment protections as the platform economy expands.

The wage ratio of non-regular workers to regular employees at large companies rose from 62.7% in 2016 to 69.1% in 2021, but fell back to 61.1% in 2025. The net assets of people aged 60 and older were 2.14 times those of people in their 30s, up from 1.47 times in 2020. South Korea's relative income poverty rate among older people was 39.7%, 2.7 times the OECD average of 14.8%.

Income distribution indicators are also showing signs of deterioration. The income quintile ratio, which measures the income gap between the top 20% and bottom 20%, rose from 5.72 in 2023 to 5.78 in 2024. The Gini coefficient also increased over the same period, from 0.323 to 0.325. The government believes that concentration in certain industries and regions, rapid population aging, and the spread of the AI transformation (AX) could further widen existing gaps.

In response, the government selected five key areas for addressing polarization: the labor market; industries and companies; regions; generations; and social disparities. In the labor market, it will focus on improving the market's dual structure, including differences in protection based on employment type and company size, seniority-based pay systems, and prime contractor-subcontractor relationships. In the industries and companies area, the focus will be on narrowing the gap between large companies and small and medium-sized enterprises. In the regional area, priorities will include easing concentration in the Seoul metropolitan area and revitalizing economies outside the capital region. In the generations area, the priority will be strengthening the foundations for self-reliance among young people and older people. The social disparities area will address ways to reduce gaps through income redistribution and social safety nets.

The response framework will also be expanded to a whole-of-government level. The government will establish a TF to address polarization, led by the Deputy Prime Minister for Economic Affairs, with the first vice ministers of the Ministry of Finance and Economy and the Ministry of Health and Welfare jointly heading the overall response team. The Vice Minister of Employment and Labor will lead the team for improving the labor market's dual structure. The vice ministers of the Ministry of Trade, Industry and Energy and the Ministry of SMEs and Startups will each lead the team for narrowing disparities between industries and companies. The vice ministers of the Ministry of the Interior and Safety and the Ministry of Land, Infrastructure and Transport will each lead the team for narrowing regional disparities. The first vice minister of the Ministry of Finance and Economy will head the team for narrowing generational gaps, and the first vice minister of the Ministry of Health and Welfare will lead the team for narrowing social disparities.

Relevant ministries, state-funded research institutes such as the Korea Development Institute (KDI), and private-sector experts will also participate in each area. Working groups will meet weekly to identify key policy tasks, while the overall response team will meet at least twice a month to coordinate policies across ministries. The government also plans to release meeting results through press releases and other channels. Rather than presenting a long list of policy tasks, the government will select structural problems that have a tangible impact on people's lives. For tasks that can be implemented, it will provide focused support through policy packages combining improvements in fiscal policy, taxation, finance, and regulation. Programs with proven results will be expanded to other industries and regions. On issues requiring social consensus, discussions will continue through public deliberation and other means.

The government plans to compile tasks agreed upon by the ministries by the end of 2026, along with tasks to be pursued in 2027, and announce them as key priorities in its "2027 Economic Growth Strategy." Starting in 2027, it will continue operating the TF to address polarization and monitor progress on the tasks.

This content was produced with the assistance of AI translation services.