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Middle Class in N. Korea

#Korea, Today and Tomorrow l 2023-04-05

Korea, Today and Tomorrow


According to a biennial social survey conducted by Statistics Korea in 2021, nearly 60 percent of the respondents perceived their socioeconomic status as “middle class.” In fact, any definition of the middle class might be rather arbitrary. The Organization for Economic Cooperation and Development or OECD defines the middle class as households with income between 75 and 200 percent of the median national income. Interestingly, the middle class does exist in North Korea, which advocates socialism and therefore favors a more equal distribution of wealth within society. 

Today, we’ll learn about North Korea’s middle class from Jeong Eun-mee, research fellow at the Korea Institute for National Unification, who published a research report titled “The North Korean Middle Class.” 

As of 2020, the median income of a family of four in South Korea stood at four-point-75 million won a month. Based on the OECD definition of the middle class, four-person households with monthly income between three-point-56 million and nine-point-five million won belong to the middle-income bracket. So, how is North Korea’s middle class defined? 

Based on data from international organizations and interviews of North Korean defectors, households earning 100 to 150 US dollars a month could be defined as the middle class in North Korea. Those in the low-income bracket spend more than 50 percent of their income on food, while the figure is below 50 percent for the middle-class people, who like to spend money on cultural and leisure activities as well as on clothes. They also save about ten percent of their income for rainy days. 

Most North Koreans have TV sets, radios and bicycles, while many more middle-class people, compared to low-income earners, have refrigerators, washing machines, computers and mobile phones. 

How was the middle class formed in the socialist North? The painful period of economic difficulties in the mid-1990s, known as Arduous March, in North Korea threatened the survival of local residents, who found a way out by creating the private market of their own free will. In the process, individuals had an opportunity to accumulate wealth. Here’s a North Korean defector.

At the time, I made a lot of money. After selling things like corn powder, I could fill my sack with money. I was able to earn more money from one single transaction than all the combined salary I had received from my company for many long years. 

As the private market expanded, a rising class of wealthy individuals, called donju, emerged to naturally form a new middle class that has special spending habits. 

After the Arduous March period, markets cropped up across North Korea, giving rise to a new group that gained sizable wealth. The group stood out in production and consumption to grow into the middle class. 

Apart from the expansion of the market, North Korea’s state policy also contributed to the emergence and growth of the middle class. The Kim Jong-un regime introduced the so-called “socialist enterprise responsibility management system” to give greater autonomy to economic units, including factories and enterprises. One of the key points of the new system was to allow enterprises to use private capital for management. The donju class played a big role in the process, prompting the middle class to grow further. Against the backdrop of the drastic change in the economic environment and in the state policy, North Korea’s middle class grew fast. 

Researcher Jeong classifies the North Korean middle class into three different groups—those in power, professionals and business-related people. Power-related middle-class people include mid-and low-ranking officials and managers who accumulate wealth by using their status or authority within the party, administrative agencies or the military. 

The professional-type middle class refers to those with a high level of education, who learned specialized knowledge or technology. Although their family background may not be good, they can enrich themselves through their academic capital. They mostly engage in work related to education, technology, healthcare or art. 

Third, the business-type middle class includes people across a wide social spectrum, such as general workers, housewives and retirees. They spend most of their work time on business or market activities and live on income they earn from the activities. 

Power-related middle-class people have a great family background. The powerful people earn income in the form of bribes by exercising the right to various privileges and wielding authority over human resources. Professionals, meanwhile, work as teachers, doctors or scientists and accumulate wealth by using their knowledge and technology. For those who belong to the business-related middle class, it is very important to build a close relationship with the power-related middle class because they have to avoid crackdowns and regulations. Therefore, they provide bribes to officials regularly. The two groups have settled into a kind of symbiotic relationship. 

North Korea’s middle class has received attention since the early years of the socialist regime. Regime founder Kim Il-sung maintained that the country should increase productivity so all the people can have living standards enjoyed by the middle class from the past. The socialist goal set by the former leader was to let the people eat white rice with beef soup, wear silk clothes and live in luxurious tile-roofed houses. 

Current leader Kim Jong-un inherited this policy stance, advocating the slogan of “building a civilized socialist nation.” It is said that middle-class North Koreans’ lifestyles and consumerism in the Kim Jong-un era have changed from the past. 

During the previous Kim Jong-il era, when North Korea had a hard time escaping from economic difficulties in the Arduous March period, quantitative assessment was important in every aspect. For example, people’s primary concern was how much rice they could eat and how often they could buy clothes. In the current Kim Jong-un era, in contrast, quality has been considered more important. Now, people are interested in more delicious rice and fashionable clothes. Many like to show off their fancy home interior decorations to show how wealthy they are. In other words, how they are viewed by other people is an important factor to consider when consuming something. 

We’ve once introduced a North Korean child YouTuber named Song-A, who explained, in fluent British English, that her favorite book is Harry Potter. 

On her YouTube channel, Song-A introduces Munsu Water Park in Pyongyang. The entrance fee of the country’s largest water park is about 20-thousand North Korean won. Considering that an average North Korean worker earns a monthly salary of 3,000 won, workers have to save seven months of salary to be admitted to the water park. 

Since Kim Jong-un came to power, North Korea has built many facilities for the middle class. Large commercial facilities, bakeries, restaurants, hair shops, and sports and leisure facilities are popular among local residents. 

Also, coffee shops hiring professional baristas and restaurants specializing in pizza, spaghetti or sushi are thriving. 

It appears that North Korean authorities are actively promoting the service industry targeting the middle class with purchasing power. 

Once people secure the necessities of life, such as food, clothing and shelter, they develop a desire for culture and consumption. Construction projects in the Kim Jong-un regime over the past ten years have focused on expanding leisure and recreational facilities including a hot spring resort, the Masik Pass Ski Resort and the Mirim Horse Riding Club. The country has built those cultural facilities to satisfy the people’s desire for consumption and also collect some profit from the consumers. 

With the North Korean middle-class’ spending habits diversifying, South Korean styles are said to be setting the trend in the North. 

North Korea urges the people to be decently dressed in accordance with socialist standards and customs. Despite the regulations, though, South Korean fashion trends and hairstyles are gaining popularity among the middle class in North Korea. 

The vast majority of the North Korean population has already experienced South Korean cultural content. North Koreans are greatly interested in the living environment, fashion and accessories shown in South Korean movies and TV series. Their keen interest in the South Korean pop culture boom, known as hallyu, goes beyond simply watching hallyu content but is reflected in the market as well. South Korean-style clothes are available in the North Korean market, with demand for such products rising. 

North Korean authorities seem to believe this phenomenon is detrimental to regime maintenance. After the North held the seventh congress of the Workers’ Party in 2016, it has beefed up crackdowns on “non-socialist and anti-socialist behavior” and enacted relevant laws. The main purpose is to prevent hallyu from influencing local residents. It means that hallyu has already permeated deeply into the lives of North Koreans, contributing to setting the standard for their lifestyles. The crackdowns are viewed as the authorities’ efforts to block hallyu from flowing into the country. 

North Korea has suffered from a food shortage due to natural disasters. Worse yet, international sanctions and border shutdowns triggered by the COVID-19 pandemic put the country in an even more difficult situation. As a result, a wind of change is blowing in North Korean society overall. Analysts say that the pandemic may cause the North Korean middle class to shrink. 

North Korea’s middle class is rooted in the market and consumption. Unfortunately, the local economy has slowed down due to the pandemic. Brisk exports and imports accelerate the expansion of wealth, but the pandemic-induced border closures have forced the country to circulate domestic resources only internally. With the economic difficulty deteriorating, some groups will inevitably fall behind the competition, starting with groups that have a weak connection with the political ruling class. As a result, the middle class may grow smaller and North Korean society may lose dynamism.

The growth of North Korea’s middle class over the last 20 years is one of the important indications that its society has changed. It seems consumption patterns of North Korean people, especially those in the middle class, have also diversified. But a dwindling middle class is feared to deepen polarization and inequality within North Korean society. 

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