Income of South Korean Households Declines in Q2; Wealth Gap Narrows


The second quarter of 2023 saw a decrease in the average income of South Korean households, according to data released by Statistics Korea on Thursday. This decrease was attributed to a reduction in government subsidies and other forms of state support, resulting in a narrowing of the wealth gap.

The average monthly income for South Korean households was 4.79 million won (US$3,613) in the April-June period, a 0.8 percent decrease from the 4.83 million won recorded in the same period in 2023. Wages saw a 4.9 percent increase to 3.03 million won, while business operations income rose 0.1 percent to 927,000 won. However, transfer income, which includes government subsidies, dropped 19.6 percent to 718,000 won.

Household spending in the second quarter increased 4.1 percent to 3.65 million won. Entertainment and culture expenses rose 14 percent, while spending on dining out and accommodation went up 6 percent. Health care and housing goods, however, saw a 6.5 percent and 2.8 percent decrease respectively.

The propensity to consume, which measures the percentage of consumption expenditure to disposable income, also increased 3.8 percentage points to 70.2 percent. This figure hit an all-time low in the second quarter of last year due to high inflation and rising interest rates.

The income gap between the top and bottom 20 percent of households also narrowed in the second quarter, with the top 20 percent receiving incomes 5.34 times greater than the bottom 20 percent. Despite this, the average monthly income of the bottom 20 percent decreased 0.7 percent to 1.12 million won, while the upper 20 percent income group saw a 1.8 percent decline to 10.14 million won.

“The decrease in income for both groups indicates that the narrowing of the wealth gap does not represent any practical improvement,” said an agency official.

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