I’ve pointed out before the stark contrast between the great rise in productivity and the lack of reward flowing to workers who are working harder than ever before. Last year, the Economic Policy Institute showed that productivity has grown almost three times faster than wages since 2001. During that time, 70 percent of the nation’s income growth has gone straight into corporate coffers as profits—presumably to continue to finance staggering pay and benefits for executives—a complete reversal from the previous seven business cycles when 77 percent of the overall income growth went to wages.

My friend Joel Rogers, director of the Center on Wisconsin Strategy, made a stunning calculation: Had wages tracked productivity as they have over the past 30 years, “median family income in the U.S. would be about $20,000 higher today than it is.”

Check this out: Taking into account productivity, the minimum wage should be $19.12—which would make it almost 50 percent above today’s median wage (not to mention the pathetic $5.15 current minimum wage). Rogers concludes: “It’s fair to say that most American workers today are making substantially less than the (historically, productivity-normed) wage of the economy’s worst-off workers of a generation ago.”

I thought about this point today because it’s not just American workers who are being shortchanged. Today’s Wall Street Journal reports (subscription required) that South Korean workers are increasingly seeing that their hard work is not translating into a fair share of the nation’s prosperity. The gap between rich and poor is growing. Sound familiar?

South Korea Experiences Growing Pains
As Its Workers Strike for Bigger Slice of Prosperity

By HENNY SENDER

Summertime in South Korea is time for striking workers to take to the streets.

Toward the end of July, construction workers, seeking higher wages and better working conditions, ended a nine-day seizure of steelmaker Posco. A few days later, workers at Hyundai Motor Co., the country’s largest auto maker in terms of sales and production, finally voted to accept a wage package after a month of unrest.

Workers at the local unit of General Motors Corp., the third-largest vehicle maker here, rejected a tentative agreement over pay. And last week, workers at Ssangyong Motor Co., Korea’s fifth-largest auto maker, said they will stage a strike starting today, unless the company withdraws a plan for layoffs.

With so much production capacity idled by strikes, Korean auto exports dropped 32% last month, according to data from J.P. Morgan Securities. Hyundai, where 44,000 production workers were on strike, estimates its losses from the walkout at more than $1 billion, which will hurt the company’s third-quarter results.

Labor conflicts have become a ritual in South Korea, where workers typically demand — and in the past usually have received — a bigger share of the country’s prosperity. Though economists expect such conflicts to accelerate, future job actions aren’t expected to bring workers significant gains. Korean companies say they no longer can afford to pay up.

After years of enjoying the benefits of globalization, Korea is the latest country to experience its downside. The nation, whose wealth is built on the awesome export performance of such powerhouses as Hyundai, Samsung Electronics and LG Electronics, has been a poster child for how globalization can improve a country’s fortunes. Korea also is feeling some of the worrisome symptoms of globalization, particularly growing income disparity.

While most workers feel their wages are stagnating, they also know that recently their country has produced the world’s greatest increase in millionaires, on a per capita basis. “Everyone is grappling with the invisible divide that comes with prosperity on the global economic stage,” says Sun Bae Kim, managing director in charge of economic research at Goldman Sachs Group in Hong Kong.