By Lee Hyo-sik
Staff Reporter


The income disparity between rich and poor widened 7.3 times in the third quarter of this year, up from 7.08 in the same quarter last year. Spending exceeded income for about half of the urban poor and social security spending, including tax, and pension fees, jumped by a double-digit rate of 10.4 percent although household spending increased by single-digit rates.





The National Statistical Office (NSO) on Tuesday reported the monthly income of the bottom 20 percent of households nationwide rose 6.1 percent to 806,000 won ($767) in the third quarter from a year ago. The income of the top 20 percent increased by 9.4 percent to 5.88 million won ($5,600) over the same period.
The bottom 20 percent of households had a shortfall of 341,000 won per month on average during the third quarter, indicating they spent more than they earned. But the top 20 percent income bracket nationwide had 1.88 million won in surplus income each month.

About 27.6 percent of the households nationwide had to borrow money to finance their living expenditures, up from 27.3 percent in the second quarter, with 50.4 percent of the lower 30 percent income bracket in the red.

Despite the substantial increase in the nominal income over the past months, the sluggish domestic consumption is unlikely to pick up in the near future as the rising inflation has reduced the real income of urban households.

According to the NSO, the average monthly income of salaried workers in urban areas topped 3.21 million won in the third quarter, up 6.5 percent from a year ago, higher than the 5.4 percent growth recorded in the same period last year.

However, after adjusting for inflation, income of the urban households increased only by 2.1 percent to 2.78 million won over the same period, lower than the 2.2 percent increase in the third quarter of 2003.

The inflation-adjusted real consumption expenditure rose only by 1.8 percent to 1.79 million won in the third quarter, lower than the 2.9 percent jump in the same quarter last year.

The nation’s consumer prices climbed 3.8 percent in October from a year before, pushing up the average inflation rate for the first 10 months of the year to 3.7 percent.

Income earned by housewives rose 4.9 percent to 338,000 won per household on average from the same period last year, with a 6.1 percent jump for the head of the household to 2.26 million won.

Property income per household also increased by 2.9 percent to 42,000 won in the third quarter despite the recent falls in interest rates and the sluggish real estate market.

Meanwhile, total household expenditure per urban salaried worker expanded 6.9 percent to 2.47 million won in the third quarter as per household consumption expenditure rose to 2.07 million won per month, up 6.2 percent from a year ago.

Monthly education expenses grew 4.8 percent to 269,000 won due to an increase in school tuition and private lesion fees.

Non-consumption expenditures, including tax, pension and social insurance, surged 10.4 percent, following the 10.6 percent jump in the second quarter, as various taxes increased by 8.9 percent and social insurances by 6.8 percent.

Urban households of salaried workers in the top 20 percent income bracket earned 5.35 times more than those in the bottom 20 percent this quarter, up from 5.16 recorded in the same quarter last year.

The higher the figure, the wider the earning gap becomes between haves and have-nots.

The top 20 percent income bracket made 6.19 million won per month, while the bottom 20 percent bracket earned 1.16 million won.

In the meantime, the national average household income jumped 7.3 percent to 2.88 million won per month in the third quarter from a year ago, thanks largely to rises in income earned by 6.5 percent and transfer income by 20 percent.

The national average for per household expenditure expanded 6.8 percent to 2.33 million won per month in the third quarter of the year from a year earlier.

leehs@koreatimes.co.kr