Don’t Be Fooled Squid Game Fans, the United States is More Unequal Than South Korea on Several Measures

The new show Squid Game on Netflix, written and directed by Hwang Dong-hyuk, puts the spotlight on income inequality in South Korea. The fictional show follows characters as they play a tournament of children’s games in the hopes of winning millions of dollars to pay off their debts. The catch is that there can be only one ultimate winner of the tournament, and the losers are killed after each game. We see how desperate these individuals are by the fact that they knowingly accept this risk.

This is not the first time South Korea’s entertainment industry has focused on the dark side of contemporary capitalism. Squid Game appears a few years after the South Korean director Bong Joon-ho’s popular and critically acclaimed movies Parasite and Snowpiercer critiqued class inequality. Squid Game’s dramatization of extreme economic hardship in South Korea might lead some to feel that conditions are better in the United States. However, the United States has more inequality than South Korea by several economic and social measures. We will discuss a few below, but we are not attempting a comprehensive review.

When looking at the ratio of the average disposable income of the top 20 percent of households to the bottom 20 percent, the United States has more inequality than South Korea (Figure 1). In the United States, the richest 20 percent have an average income 8.4 times the lowest 20 percent; in South Korea the ratio is 6.5 times. The gap between rich and poor is larger in the United States.

Figure 1

The United States is also worse on child poverty. In the United States, child poverty is almost three times what it is in South Korea (Figure 2). This analysis is based on a relative poverty measure, specifically the share of children living in households earning less than 60 percent of the median income. In the US, nearly a third (30 percent) of children are in poverty based on the relative poverty measure. In South Korea, only about a tenth (11.5 percent) are in poverty. Although the United States is richer than South Korea in terms of GDP per capita, proportionally more US children are poorer. 

Figure 2

South Korea’s lower child poverty rate is partly due to the fact that it spends a larger share of its GDP on family benefits (Figure 3). Family benefits include childcare assistance, child allowances, and paid family leave. In 2018, South Korea spent 1.2 percent of its GDP on family benefits. The United States only spent half that share. The United States’ “family values” rhetoric has had a difficult time manifesting itself in the federal budget.

Since the start of the pandemic, the United States has included spending on family benefits in the stimulus and relief packages. This additional spending has improved the US position, but we do not yet have the more recent data to make the comparison with South Korea. This increased investment in children in the United States could continue if President Joe Biden’s Build Back Better plan is passed in Congress.

Figure 3

Taxes on US corporate profits haven’t been a significant share of US government revenue for a long time. This may change under the new agreement to set a global minimum corporate tax rate and a Biden plan to increase the US corporate tax rate. The latest data from 2019 (Figure 4) shows the tax corporations pay on profits in the US is a meager 0.96 percent of GDP, compared to South Korea where corporate taxes account for 4.3 percent of GDP. This issue is increasingly important as large US corporations have profited during the pandemic at the expense of workers.

Figure 4

When it comes to gender differences, the men in Squid Game prefer to stick together, while the women players are often mistreated and marginalized. Although the percentage of women who agree that a husband/partner is justified in beating his wife/partner under certain circumstances is higher in South Korea, the actual number of women reporting abuse from a domestic partner in a lifetime is higher in the United States (Figure 5). This situation may stem from the fact that the OECD also rates the United States as having weaker laws protecting women from domestic violence.

Figure 5

Squid Game touches on the class conflict capitalism creates. The main character has a flashback to a violent strike at an automaker factory, reminiscent of a 2009 strike at the Ssangyong Motor Company. Hundreds of workers protested after mass layoffs during the peak of the financial crisis by occupying the factory, which ultimately led to violent clashes between workers and police. While Ssangyong and other South Korean corporations have a history of repressing workers, South Korean workers have more labor protections than US workers. As of 2018, the percentage of workers with the right to bargain was 14.8 percent in South Korea, while the United States was lower at 11.7 percent (Figure 6).

Figure 6

US viewers of Squid Game, if they aren’t already aware, should know that millions in the United States are living a real-life but less immediately deadly version of the game. There are millions of people in the United States living in poverty and struggling to pay their bills. Even many people with middle-class incomes are burdened by debt. Many of these people play the lottery in the hopes of winning big and changing their fortunes.

South Korea is an extremely unequal country, but at the same time, it has taken significant concrete steps to reduce inequalities, especially when it comes to families and children. The United States, on the other hand, moved in the other direction with the Trump tax cuts. In Squid Game, the episode about the characters’ lives outside of the game was titled “Hell.” The United States is wealthy enough to end this financial hell for its people, but it will only do so if people work together and demand it from policymakers rather than see each other as competitors in a zero-sum game.


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