By Lee Hyo-sik
Staff Reporter
A growing number of households are spending more than they earn as a result of the soaring price of oil and other imported commodities.
More families, however, are seeing their incomes grow at a much slower pace amid the tight job market stemming from the economic downturn. The bearish stock market and falling home prices are not helping, either, with many having to pay higher interest on loans amid rising rates.
According to the National Statistical Office Monday, 28.1 percent of households spent more than they earned in the second quarter, up from 27.8 percent a year earlier. The ratio was the highest since the office began compiling such data in 2003.
This means 3.4 million families are in debt out of 12 million households, excluding those working in agriculture and fisheries and people living alone. The number of households in the country reached 16.7 million in June.
The office said 49.6 percent of the bottom 30 percent of households went into debt in the second quarter, down from 51.2 percent a year ago. But more middle-class households saw their financial status worsen over the past year as 23.7 percent spent more than they earned, up from 22.5 percent in the second quarter last year.
Of those in the top 30 percent income bracket, 12.3 percent posted a shortfall in the family budget, up from 11.4 percent over the same period in 2007.
``Consumers have been hit hard by the surging costs of basic goods and services amid slower income growth. The stagnant job market has had a severe impact on family finances,'' an official said.
The number of job openings last month was 153,000, well below the government target of 200,000 for the fifth consecutive month. Sluggish private consumption has hit the services sector hard, stifling job growth. The housing market slump has also made builders reluctant to carry out construction projects and hire workers.
The official said more households are expected to go into debt as they are being forced to pay more to buy goods and services due to the soaring prices of crude oil and other raw materials.
Last month, consumer prices rose 5.9 percent from a year earlier, the highest since a rise of 6.8 percent in November 1998. Because of high prices for crude oil and other commodities, inflation is widely expected to exceed 6 percent in August and may even hit 7 percent by other estimates.
Income distribution also worsened in the second quarter. The top 20 percent of income earners earned 7.46 times more than the poorest 20 percent, the widest gap for a second quarter since 2003.
The monthly income of the top 20 percent averaged 6.64 million won in the second quarter, up 6.3 percent from a year ago, while the bottom 20 percent made 891,000 won, up 3.5 percent.
The top 20 percent posted a 2.1 million won monthly surplus, but the bottom 20 percent spent a monthly average of 308,000 won more than they earned.