Labor and Business Income Both Declined... Government Praises "Improvement in Distribution Indicators"

[Sejong=Asia Economy Reporter Son Seonhee] In the first quarter of this year, household income from labor, business, and property all decreased. Due to the difficulties faced by households amid the COVID-19 pandemic, so-called 'market income' declined across the board.

According to the 'First Quarter Household Trends Survey Results' released by Statistics Korea on the 22nd, the labor income of households nationwide with one or more members (including agricultural, forestry, and fishery households) in the first quarter of this year was 2,778,000 KRW, down 1.3% compared to the same period last year. This is the largest decline ever recorded for a first quarter.

Business income also fell to 767,000 KRW, a 1.6% decrease over the same period. Property income (33,000 KRW) dropped by 14.4%. This simultaneous decline in household labor, business, and property income is the first since the second quarter of last year, when the COVID-19 pandemic began to spread in earnest.

However, when including transfer income in addition to this market income, the total average monthly income was 4,384,000 KRW, an increase of 0.4% compared to one year ago. Although households earned less market income through actual labor or business, transfer income increased due to government disaster relief payments made last year. In other words, the reduced household income was barely supported by fiscal measures.

Meanwhile, economic authorities have self-assessed that the 'distribution indicators have improved.' Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated, "The income distribution situation in the first quarter has greatly improved," and evaluated that it surpasses the first quarter of 2019, before COVID-19.

This is not incorrect numerically. While income generally decreased across all quintiles, government support funds were concentrated on low-income groups.

However, looking only at market income such as labor, business, and property income, the first quarter's equivalized income quintile ratio recorded 16.20 times, worsening from 14.77 times a year earlier. Excluding the one-time government disaster relief payments, the actual distribution indicator has deteriorated further.

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