 |
By Park Jae-hyuk
The income disparity between the haves and have-nots has widened as the COVID-19 pandemic has resulted in employers slashing the country's low-paying jobs.
Household spending was also hit hard by the spread of the coronavirus, showing the steepest decline since the government started collecting statistics in 2003.
According to Statistics Korea (KOSTAT), Thursday, the average monthly income of the bottom 20 percent of households during the first quarter remained flat year-on-year, as they earned 1.49 million won ($1,211) a month on average.
In contrast, the average monthly income of the top 20 percent of households rose 6.3 percent to 11.15 million won during the period.
The average household earned 5.35 million won a month, up 3.7 percent from a year earlier.
KOSTAT attributed the inequality to the declining wages of low-income households followed by fewer temporary positions.
According to the state-run statistics agency, those in high-income brackets could enjoy larger earnings as the number of workers at big companies has increased and larger national pensions were given to wealthy families.
"As the number of temporary jobs continued to decline in April due to COVID-19, it is feared the income inequality could linger in the second quarter," KOSTAT said in a press release.
Its data also showed average household spending dropped 4.9 percent year-on-year to 39.4 million won, despite the growth in their earnings.
Local households especially reduced their spending on clothing, education and entertainment.
"As the demand for group tours and shows has decreased, household spending on group tours and cultural services dropped by 51.9 percent and 16.4 percent, respectively," KOSTAT said.
Household spending on groceries, however, rose 10.5 percent year-on-year, as more people have been eating at home. Healthcare expenditures also grew 9.9 percent due to the rising purchase of face masks.
In response to the statistics, the Ministry of Economy and Finance said the government will speed up its efforts to stabilize the job market and will continue to offer financial support for low-income families.
Meanwhile, Hana Institute of Finance's (HIF) analysis of credit card usage showed travel agencies, movie theaters and amusement parks took the brunt of the COVID-19 pandemic. Cram schools, bars and restaurants also suffered sharp declines in business, according to its report.
In contrast, consumers spent more on online shopping, imported vehicles, cosmetic surgery and bicycles.
"Given that consumer sentiment has worsened and the government's emergency relief money is likely to be used mostly for buying groceries, the normalization of most industries is unlikely to be seen in the near future," HIF analyst Jung Hoon said.
