Cross-ministerial measures targeting young people and vulnerable groups such as the self-employed—those who have lost their footing on the social mobility ladder amid the so-called "K-shaped divide"—will be announced next week.
According to related ministries on Monday, the Ministry of Economy and Finance is preparing a "Growth for All" plan to address polarization, working alongside the Ministry of Employment and Labor, the Ministry of Trade, Industry and Energy, the Ministry of Health and Welfare, and the Ministry of SMEs and Startups. The core of the plan is to link cross-ministerial policies and budgets so that growth achievements centered on advanced industries can spread to young people, the self-employed, small and medium-sized enterprises, and vulnerable groups. To this end, the government has held meetings through a joint inter-ministerial task force since early this year. As a funding source, the government is reviewing a plan to use part of the additional tax revenue from this year's semiconductor upturn. Some of the measures will be unveiled through the second-half economic growth strategy. Related projects are also expected to be reflected in each ministry's 2027 budget proposal.
The government is known to be placing weight on strengthening the income base of young people, while the plan will also include detailed projects such as easing the gap between large corporations and SMEs, supporting the self-employed, and supporting vulnerable groups. These include increasing incentives so that companies can hire more talent, and measures to support young people's entry into the labor market. The strategy is to reduce young people's income crevasse (gap) through such measures.
The government also plans to reflect the "Growth for All" stance in tax policy. The 2026 tax reform bill, to be announced late this month, will include strengthening tax support for youth startups, reforming the Earned Income Tax Credit (EITC), and expanding tax support for SME workers. It will also push for reforming Individual Savings Accounts (ISA) to induce productive finance and introducing a tax credit for domestic production. Both inside and outside the government, such tax support is expected to help expand young people's income base and support asset formation.
The Ministry of Economy and Finance will also announce part of its "youth jobs measures" in this second-half economic growth strategy. The main thrust is to expand projects with high field demand among existing Youth New Deal policies and to identify new tasks that resolve companies' hiring difficulties. Earlier, the government has pursued job training in new industries such as AI, expanded work experience, and support projects for young people facing employment difficulties through the Youth New Deal policy.
The government has made youth the core target of the measures because it judges them to be the group where polarization is deepening most rapidly. The Bank of Korea (BOK) analyzed in a recent report that among households in the bottom tier for both net assets and income, the share of the 2030 generation nearly doubled from 7.9% in 2020 to 15.2% last year. The diagnosis is that a "compound polarization" is underway, with the asset gap driven by rising real estate prices and the income gap between industries driven by the spread of AI widening simultaneously.
President Lee Jae-myung also directed at a recent Cabinet meeting: "Income polarization is severe, and because only large blue-chip stocks have risen sharply in the stock market, polarization is occurring." He added, "We must study income support measures."
In relation to this, the presidential Basic Society Committee is reviewing income guarantee measures including basic income and youth participation income. The related policy proposal is expected to be unveiled as early as the end of August. An official at the Ministry of Economy and Finance said, "Since the polarization issue is significant, it is a major concern that we are examining," adding, "The related measures will be announced later through ministerial consultations."
