By Lee Hyo-sik
Staff Reporter
About 32 percent of all Korean households and 56 percent of low-income households are spending more than they're earning.
This means at least 3.7 million households are in debt out of 11.6 million households, excluding those engaged in the agriculture and fisheries sectors as well as one-member households. The total number of households was put at 15.9 million.
More households are expected to go into debt as they are being forced to pay more to buy goods and services due to soaring prices of crude oil and other raw materials.
The ongoing sluggish job market has also hit poorer families harder with many companies eliminating non-regular and temporary positions amid deteriorating business conditions.
According to the National Statistical Office (NSO) Monday, 55.8 percent of the bottom 30 percent of total households went into debt in the first quarter of the year, up from 54.1 percent a year earlier. As a whole, 31.8 percent of households were in the red, up from 30.9 percent a year ago.
More middle-class households saw their financial status worsen over the past year as 27 percent spent more than their income, up from 25.3 percent in the first quarter of 2007.
However, within the top 30 percent income bracket, 85.6 percent saw either their finances improve or no change as only 14.4 percent posted a shortfall in the family budget, down from 15.2 percent over the same period last year.
The top 20 percent of the richest households nationwide earned 8.41 times more than that of the poorest 20 percent in the January to March period, up from 8.4 times a year earlier. This is the greatest income gap since the statistical office began compiling such data in 2003.
The monthly income of the top 20 percent averaged 7.3 million won in the January to March period, up 4.7 percent from a year ago, while the bottom 20 percent made 870,000 won, an increase of 4.6 percent over the one-year period.
The rich 20 percent posted a 2.2 million won monthly surplus, but the bottom 20 percent spent a monthly average of 440,000 won more than they earned.
``Compared with rich families, poor households have been hit harder by surging costs of basic goods and services amid slower income growth. The ongoing stagnant job market has had a more severe impact on poorer families that depend more heavily on salaries for their living,'' an NSO official said.
In the first quarter, there were 123,000 less temporary positions across the country compared to the previous year as businesses made redundancies amid an increasingly pessimistic business outlook.
Spending on auto fuel and other utilities increased 14.6 percent because of higher crude oil prices. Families had to pay 12.6 percent more in taxes, pensions and other social security-related costs.