Korea launches pan-government task force to tackle deepening economic polarization

People walk across a crosswalk near Seoul Station on Nov. 6, 2026. (Yonhap)

Despite projections that Korea’s economy will grow by around 3.5 percent in 2026, the government is moving to tackle widening inequality, as the gains from economic growth continue to bypass significant segments of society.

The government aims to narrow the “K-shaped” economic divide by targeting five key areas closely linked to people’s livelihoods, including the labor market and regional development.

The government held an emergency meeting of economic ministers at the government complex in Seoul on Wednesday morning to discuss the implementation plan for addressing polarization. 

The government attributed the multifaceted problem of polarization to the long-term accumulation of social and economic factors in Korean society.

During the past period of rapid growth, led by large corporations and exports, economic gains did not sufficiently trickle down to small and medium-sized enterprises and other sectors. Instead, disparities across society widened as asset gaps, particularly in real estate, grew and the number of jobs with low employment stability increased. 

The government pinpointed five factors that deepened polarization: the entrenchment of a dual labor market based on firm size and employment type; growth concentrated in the semiconductor and IT industries and the Seoul metropolitan area; a decline in the capacity to create jobs for young people; worsening income distribution; and asymmetry in information about and adoption of artificial intelligence.

“Unchecked polarization could undermine the sustainability of Korean society. Achieving a major shift toward growth for all will require fully mobilizing national capabilities and implementing a systematic response to polarization,” the government noted. 

To this end, the government announced that it will establish a pan-government collaboration system involving relevant ministries, state-funded research institutes, and private-sector experts to address polarization.

Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung-il will lead a task force on addressing polarization, which will identify measures to address polarization by focusing on five key areas where the public keenly feels the divide: the labor market, the corporate sector, regional inequalities, generational gaps, and broader social divides.

The government plans to provide comprehensive support, including fiscal, tax, financial, and regulatory reforms, for these key initiatives. Issues requiring public discussion will be subject to further deliberation, including through public debate. 

An official said the government aims to finalize detailed plans for interministerial initiatives and other measures for 2027 by the end of this year, incorporating them into the 2027 Economic Growth Strategy. The task force will continue its work next year, identifying additional measures and overseeing their implementation.