August 24, 2018 12:30
The employment shock created by the sharp minimum wage hike has resulted in the biggest decline in earnings on record for the low-income bracket.
Statistics Korea said Thursday that households in the bottom 20 percent income bracket earned 7.6 percent less in the second quarter than in the same period last year at just W1.33 million a month (US$1=W1,122).
The decline has slowed a little compared to the eight-percent drop seen in the first quarter but is still the steepest fall for the second quarter since the government began tallying quarterly data in 2003.
Earned income among households in the bottom 20 percent plummeted 15.9 percent during the second quarter, while income from business fell 21 percent.
That suggests the government's aim of achieving an economic recovery by boosting the minimum wage and stimulating private consumption has flopped.
By contrast, the average monthly income of households in the top 20 percent soared 10.3 percent in the second quarter on-year to W9.13 million, the first double-digit growth ever and exactly the opposite of what the government had intended.
Surging real estate values and improved working conditions for regular employees ended up boosting earnings at the top end.
Bang Sang-young at Statistics Korea said, "Private consumption has been slow due to layoffs at shipbuilders and automakers, resulting in a marked decline in earnings among the self-employed, while wages earned in the bottom 40 percent of the income bracket declined sharply as fewer people remain employed."
- Copyright © Chosunilbo & Chosun.com