Business Income Down 5.1% in Q4 Last Year... Third Consecutive Quarterly Decline Hits Record Low

2020 4th Quarter Household Trends Survey

[Asia Economy Reporter Son Sunhee] Due to the COVID-19 pandemic, self-employed individuals suffered significant damage, resulting in the average monthly business income per household in the fourth quarter of last year dropping by 5.1% to 994,000 KRW. This marked the first time since statistics began that income declined for three consecutive quarters, reaching an all-time low.

According to the "2020 Fourth Quarter Household Trends Survey" released by Statistics Korea on the 18th, the average monthly income per household in the fourth quarter of last year was 5,161,000 KRW, up 1.8% compared to the same quarter of the previous year. Breaking down the details, earned income decreased by 0.5% to 3,401,000 KRW, and business income fell by 5.1% to 994,000 KRW.

Jung Dong-myung, Director of the Social Statistics Bureau at Statistics Korea, stated in a briefing that "earned income and business income have decreased for three consecutive quarters since the second quarter of last year," adding, "This appears to be due to the decline in employment and sluggish business conditions in face-to-face service industries amid the resurgence of COVID-19."

On the other hand, non-regular income increased by 49.1% to 102,000 KRW, and transfer income rose by 25.1% to 636,000 KRW. Property income increased by 7.4% to 28,000 KRW.

The average monthly expenditure per household was 3,892,000 KRW, down 0.1% compared to the same quarter of the previous year. Consumption expenditure decreased by 0.1% to 2,907,000 KRW, and non-consumption expenditure fell by 0.3% to 986,000 KRW.

In the fourth quarter of last year, social distancing measures due to COVID-19 led to a significant reduction in spending in sectors such as education (-15.2%) and food & accommodation (-11.3%). Conversely, spending increased in sectors such as foodstuffs & non-alcoholic beverages (16.9%), household goods & domestic services (15.6%), and health (8.5%).

Disposable income per household was 4,175,000 KRW, up 2.3% compared to the same quarter of the previous year. The surplus amount increased by 8.2% to 1,269,000 KRW.

Looking at income quintiles, the average monthly income of households in the first income quintile was 1,640,000 KRW, up 1.7% compared to the same quarter of the previous year, while the average monthly income of households in the fifth income quintile also increased by 2.7% to 10,026,000 KRW. Regarding average monthly consumption expenditure, households in the first income quintile spent 1,620,000 KRW, up 1.8% from the previous year’s same quarter, whereas households in the fifth income quintile spent 4,512,000 KRW, down 0.4%.

Director Jung explained, "With the increase in transfer income such as the second round of disaster relief funds, household income increased across all quintiles."

This content was produced with the assistance of AI translation services.