November 23, 2018 12:54
Fresh figures show that the income gap has widened to unprecedented levels despite the Moon Jae-in administration's attempts to stimulate growth by boosting the incomes of low-paid workers and helping small businesses.
Statistics Korea on Thursday said households in the bottom 20 percent of the income bracket earned an average of W1.32 million a month in the third quarter of this year, down seven percent compared to the same period last year (US$1=W1,131).
Although the rate of decline slowed slightly from the first two quarters, it was the worst drop for a third quarter recorded since Statistics Korea began tallying such data in 2003.
The monthly income of households in the bottom 20 percent stood at just W478,900, plunging 22.6 percent from the third quarter last year. The rate of decline was even more dramatic than the 13.3 percent drop in the first quarter and 15.9 percent decline in the second. Income from enterprises earned by the self-employed also shrank 13.4 percent.
In contrast, the average monthly income of households in the top 20 percent stood at a whopping W9.74 million, up 8.8 percent on-year. That increased the gap between the top and bottom earners to an unprecedented 5.52 times.
The average overall income for a household of two or more people stood at W4.75 million a month in the third quarter, up 4.6 percent compared to the same period of 2017 and the biggest rate of growth since the first quarter of 2014. But the rise benefited only middle and upper-class households.
At the same time the number of employed household members in the bottom 20 percent plunged 16.8 percent, though in the top 20 percent it grew 3.4 percent. That flies in the face of government claims to be raising living standards for the poor by hiking the minimum wage and capping the legal working week at 52 hours.
Prof. Shin Se-don at Sookmyung Women's University said, "The sharp decline in earned income among poorer households can only be explained by the decline in number of short-term jobs due to the minimum wage hike. The government insists that its policies will bear fruit next year, but it needs to admit that they have so far increased the gap between rich and poor."
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