South Korea’s income disparity between the haves and the haves-not worsened in the third quarter as income for the bottom bracket dropped sharply despite the government relief aids amid protracted Covid-19 environment.
According to data released by Statistics Korea on Thursday, monthly income of households in the bottom 20 percent bracket averaged 1,637,000 won ($1,468) in the July-September period, down 1.1 percent from the same period a year ago. The monthly average income for the top 20 percent bracket, meanwhile, rose 2.9 percent to 10.397 million won during the same period.
Income quintile share ratio – which measures inequality in income distribution by dividing average income of the top 20 percent bracket by that of the bottom 20 percent bracket – came to 4.88 in the third quarter, higher than 4.66 in the third quarter last year. The higher the ratio, the more inequality in income.
The monthly income of households in the bottom 20 to 40 percent bracket averaged 3.376 million won in the third quarter, down 1.3 percent from the same period a year ago, while that of households in the middle 40 to 60 percent increased 0.1 percent to 4.731 million won and of households in the top 20 to 40 percent bracket increased 2.8 percent to 6.381 million won.
The poor category mostly survived on state handouts.
The transfer income of households in the bottom 20 percent bracket, or mostly social benefits, rose 9.6 percent to 765,000 won in the third quarter, while their earned income fell 10.7 percent to 553,000 won and business income 8.1 percent to 276,000 won.
Business income fell in the July-September period amid a plunge in the number of temporary and day-to-day jobs due to resurgence of Covid-19 and sluggish service industry such as of restaurant and accommodation sectors.
The earned income of households in the top 20 percent bracket edged down 0.6 percent on year to 7.438 million won in the July-September period but overall income increased on more business and transfer income.
The average monthly income of all households reached 5.305 million won in the third quarter, up 1.6 percent from the same period a year ago but earned income and business income fell 1.1 percent and 1 percent respectively. Transfer income increased 17.1 percent during the same period on the back of government subsidies.
The average monthly spending fell 2.2 percent to 3.989 million won in the third quarter amid a fall in consumer spending in face-to-face service sector, data showed.
By Chun Gyung-woon and Lee Eun-joo
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]