Shopping in Pyongyang, and Other Adventures in North Korean Capitalism
Among close observers, there is a growing consensus that the economy has been undergoing a quiet revolution. The South Korean economist Byung-Yeon Kim is among the first to offer hard data about what this transformation looks like, in his 2017 book, “Unveiling the North Korean Economy.” The average worker in North Korea’s informal economy, Kim reports, earns 80 times more than at an official job. Approximately 23 percent of employees at state-run enterprises are simultaneously involved with some unofficial form of business. At least 58 percent of all companies in North Korea employ so-called 8/3 workers, who pay a fee in order to be absent from work and engage in unofficial market activities; these funds are an important form of revenue for these companies, helping them to continue paying the salaries of their regular employees.
Even if most North Koreans don’t explicitly know what their songbun categorization is, everyone can generally intuit it, based on where they live, what their ancestors were known to have done, the degree of opportunities open to them and the level of discrimination to which they are regularly subjected from school age onward. Songbun, while a clear component of the police-state apparatus, has historically been tethered to the North’s traditional centrally planned economy. And there is evidence that as North Korea goes further in the direction of the free market, this political class system is eroding.