'Rich Get Richer, Poor Get Poorer'... Household Income in Q2 Increases Only for the 'Top 20%'

[Sejong=Asia Economy Reporter Son Seonhee] In the second quarter, household income increased only for the top 20% of households. As the effect of the 'nationwide disaster relief fund' distributed during the same period last year disappeared, income distribution indicators worsened further.

According to the Household Trends Survey for the second quarter recently announced by Statistics Korea, the average monthly income of the top 20% was 9,241,000 KRW, an increase of 1.4% compared to the same period a year ago.

On the other hand, households in the 1st to 4th quintiles, excluding the top 20%, all saw a decrease in income. For the 1st quintile (bottom 20%), the average monthly income was 966,000 KRW, down 6.3%. The 2nd quintile (20-40%) households earned 2,365,000 KRW, down 0.9%, the 3rd quintile (40-60%) households earned 3,661,000 KRW, down 0.7%, and the 4th quintile (60-80%) households earned 5,192,000 KRW, down 3.1% respectively.

The average monthly income of all households also decreased by 0.7% to 4,287,000 KRW. This is the first time in four years since the second quarter of 2017 that household income has declined in the second quarter.

Jung Dongmyeong, Director of the Social Statistics Bureau at Statistics Korea, explained, "This phenomenon occurred as a base effect due to the nationwide disaster relief fund, which provided up to 1 million KRW per household in May last year."

Excluding transfer income, earned and business income of low-income groups increased. Earned income for the bottom 20% rose by 19.6% in the second quarter, and business income increased by 16.1%. However, since this group was the main beneficiary of the disaster relief fund, the decrease in public transfer income had a significant impact on household income.

Income distribution indicators also worsened. The equivalized disposable income quintile ratio, which compares disposable income by household size between the bottom 20% and top 20%, was 5.59 times in the second quarter, up from 5.03 times in the same period last year. This means the income gap has widened.

However, compared to 5.74 times in the second quarter of 2019 before the COVID-19 pandemic, the distribution situation has slightly improved.

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