Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Poorest households struggle with reduced income
A Statistics Korea official gives a press briefing on household incomes for the third quarter at the Government Complex Sejong, Thursday. Yonhap
By Yi Whan-woo
Korea's poorest households are getting poorer, the only group among five income brackets to have seen reduced incomes in the third quarter, data showed, Thursday.
In data released by Statistics Korea, households nationwide earned an average of 5.03 million won ($3,860) per month in the third quarter, up from 4.86 million won tallied a year before.
But the monthly income of the bottom 20 percent averaged 1.12 million won during the cited period, down 0.7 percent from a year earlier.
In contrast, the top 20 percent of income earners saw their monthly income average at 10.84 million won, up 4.1 percent year-on-year.
The income of the remaining three groups also increased — 5 percent year-on-year for those in the second-highest group, 2.3 percent year-on-year for the middle-tier group, and 0.3 percent year-on-year for those in the fourth group.
“Monthly earnings only decreased for the lowest income bracket, despite severe weather and other adverse conditions that affected prices and the economy,” Statistics Korea said.
In particular, it was the first time that the monthly income of the bottom fifth of earners dropped for a second consecutive quarter, the stats agency noted.
The finding comes as the 2023 economic outlook for the country was revised down to 1.4 percent.
Inflation, on the other hand, rose for three straight months — 3.4 percent in August, 3.7 percent in September and 3.8 percent in October — after cooling down to a 25-month low of 2.3 percent in July.
Correspondingly, the Bank of Korea (BOK) speculates it will take a longer time for inflation to ease to the target rate of 2 percent, although it estimates inflation will drop to the low 3 percent range at the end of this year and gradually stabilize in 2024.
Meanwhile, income earned through wages grew 3.5 percent year-on-year to an average of 3.22 million won per month, while gains from business operations moved down 0.8 percent to 984,000 won, Statistics Korea said.
Transfer income backed by state support moved up 11.7 percent to 729,000 won.
Monthly household spending jumped 4 percent year-on-year to 3.87 million won.
Of the amount, expenditures on food and non-alcoholic beverages came to 431,000 won, up 6 percent from a year earlier. Non-consumption expenditures, which include interest and taxes, increased 4.3 percent to 1.06 million won.