The Korea Herald


Household income grows in Q3, but wealth gap widens

By Yonhap

Published : Nov. 22, 2018 - 13:09

    • Link copied

South Korea's household income rose in the third quarter from a year earlier, but the income gap between the haves and have-nots widened, a government report showed Thursday.

An average household earned 4.74 million won ($4,200) per month in the July-September period, up 4.6 percent from the previous year, according to the report by Statistics Korea.

(Yonhap) (Yonhap)

The inflation-adjusted real income increased 3 percent on-year over the one-year period, the data showed.

The latest statistics showed households' income earned through wages rose 4.5 percent on-year to an average 3.2 million won over the three-month period, and transferred income, which includes state welfare support, climbed 22.3 percent to 552,700 won.

Profits generated by assets and earnings from business operations rose 9.3 percent and 1.1 percent, respectively, the latest numbers showed.

The monthly average income of the bottom 20 percent income bracket, on the other hand, dropped 7 percent on-year to 1.32 million won.

In contrast, households in the upper 20 percent income range earned 9.73 million won during the third quarter, up 8.8 percent from a year earlier.

Consequently, the country's distribution ratio for disposable income, a key barometer of earnings equality, reached 5.52 in the July-September period, compared with 5.18 a year earlier and 5.23 three months earlier.

The statistical office said the decline in the monthly average earnings of the bottom 20 percent income bracket was due to a sharp fall in wage income and revenue from smaller self-employed business owners.

The latest figures come despite the Moon Jae-in administration's push for income-led growth, which is centered on raising the country's minimum wage.

The government increased the minimum wage for all workers by 16.4 percent this year to 7,530 won from 6,470 won in 2017, after setting a goal of raising hourly pay to at least 10,000 won by 2020.

Seoul said the hike is aimed at income-led economic expansion and a reduction of the pay gap between workers, but critics argue that the increase is hurting entry level jobs and weighing down the local economy.

In a statement, the Ministry of Economy and Finance said it will make more effort to bridge the income gap.

Although the gap between haves and have-nots widened, the pace of widening slowed in the third quarter, the ministry said.

Household income for low-income or underprivileged people did witness some gains after the government marked up their support allowance, the ministry said.  (Yonhap)