Last year, earned income for low-income households fell for the first time in five years.
According to the Korean Statistical Information Service (KOSIS) of the National Data Office (formerly Statistics Korea) on the 7th, the average earned income of households in the bottom 20% (first quintile) last year was 4.01 million won, down 1.3% from a year earlier. This is the first time since 2019 that earned income for the bottom 20% has declined.
This appears to reflect the weak economy and worsening employment conditions for temporary and daily workers, jobs in which many low-income people are employed.
The average earned income of households in the top 20% (fifth quintile) was 120.06 million won, up 3.7%. Their earned income has steadily increased since related statistics began in 2017. As a result, income polarization is also deepening. The gap in earned income between the top and bottom last year reached about 30 times, widening for the second consecutive year.
This trend can be interpreted to mean that low-income households have less capacity to bear rising prices. In the third quarter this year, households in the bottom 20% spent about 40% of their consumption expenditure on subsistence items such as food, housing, electricity, and gas bills. This is twice the share of subsistence spending for the top 20%. If the exchange rate stays high going forward, higher prices for imported energy are expected to add to upward pressure on city gas and heating bills.