The monthly income of South Korean households increased 2.6 percent on-year in the first quarter thanks to more employment and increased wages, a government report showed Friday.
The monthly income of households consisting of two members or more averaged 4.51 million won ($4,131) in the January-March period, according to the report by Statistics Korea. When adjusted for inflation, income increased 2 percent.
The growth rate accelerated from a 2.4 percent gain reached in the final quarter of last year.
The agency attributed the growth to an increase in earned income among households and more people getting jobs. The number of jobs increased by more than 300,000 in the first quarter.
“The main contributor was the 3.8 percent increase in wages,” said Suh Woon-joo, head of the welfare statistics division.
She added that transfer income, which encompasses state welfare support, and profits generated by assets rose 10.4 percent and 17.9 percent, respectively. On the other hand, earnings generated by business operations shrank 4.6 percent.
The official said the contraction in business earnings is due to fewer self-employed people.
Household expenditures also edged up 0.2 percent on-year to 3.5 million won per month in the first quarter. The increase is much smaller than earning gains, a sign that people are holding back on consumption.
“Spending has not kept pace with earnings since 2012 with factors like the aging population and debt repayment playing a part in the disparity,” Suh said.
Of the total spending, consumption expenditures reached 2.65 million won, unchanged from the year before, while non-consumption spending rose 1 percent to 849,000 won.
Spending on food and non-alcoholic beverages rose 2.3 percent, with health care outlays moving up 4 percent. Expenditures on transportation, including cars and gas, dropped 4.5 percent, with spending on communication fees and equipment and entertainment contracting 8.4 percent and 0.1 percent, respectively, vis-a-vis the year before.
Non-consumption expenditures, including taxes, insurance and interest payments, were fueled by more money going to employment and social welfare insurance payments.
The disposable income of households — total income minus non-consumption spending — grew 3 percent on-year to more than 3.66 million won during the first quarter. The growth rate is faster than the 2.9 percent gain in the fourth quarter of last year.
For 2014, the country’s Gini coefficient, which measures income inequality, stood at 0.302, unchanged from the year before, the report said.
The coefficient is one of the main measures that gauge the income gap between the haves and have-nots. A reading of zero means complete income equality, while higher numbers nearing 1 indicate a widening gap in earnings between the rich and poor.
The statistical office said there was a slight reduction in the wealth gap between the very wealthy and the very poor in 2014, with the relative poverty rate falling 0.2 percentage point to 14.4 percent for all households, including one-person units.
Relative poverty is the condition in which people lack the minimum amount of income needed to maintain the average living standard within their society. (Yonhap)
