Q1 Wage and Business Income 'Joint Increase'... Household Income Growth Rate Hits Record High of 10.1%

Results of the Household Trends Survey by Statistics Korea

[Asia Economy Sejong=Reporter Son Seon-hee] In the first quarter of this year, both labor income and business income of households recorded double-digit growth rates, rising sharply. As a result, the overall household income growth rate also rose to the double digits, setting a new record high. This is attributed to the recovery of the employment market and the easing of social distancing measures since the beginning of this year, which improved business conditions.

According to the 'Household Trends in the First Quarter' released by Statistics Korea on the 19th, the average monthly income per household nationwide in the first quarter was 4,825,000 KRW, an increase of 10.1% compared to the same quarter last year. This growth rate is the highest since income data including households with one or more members began to be compiled in 2006. However, considering the rising inflation rate, real income increased by 6%.

Labor income, which accounts for the largest portion (63.5%) of household income, was 3,062,000 KRW, up 10.2% from the same period last year. Business income was 862,000 KRW, increasing by 12.4% during the same period. Both labor and business incomes have increased for four consecutive quarters since the second quarter of last year. In particular, business income has shown an expanding growth margin, reflecting the economic recovery trend following the COVID-19 pandemic.

Lee Jin-seok, Director of Household Income and Expenditure Trends, said, "In the first quarter, employment conditions improved with an increase in the number of employed persons, and the easing of social distancing measures led to an improvement in the service sector, resulting in a significant increase in both labor and business incomes." He added, "Public transfer income also increased due to quarantine support funds and compensation for small business losses, leading to an overall increase in household total income."

On the other hand, household property income was 32,000 KRW, down 2% compared to the same period last year. Regarding this, Director Lee explained, "Property income accounts for a small amount of the total income, so the relative standard error is high, requiring careful interpretation," and added, "It appears to be due to a decrease in dividend income and is unlikely to be related to real estate."

Household expenditure in the first quarter was 3,496,000 KRW, up 6.2% compared to the same quarter last year. Spending related to food and accommodation increased by 13.9% as social distancing measures were eased, and health expenditures rose by 7.5% due to the spread of the Omicron variant.

However, since income increased at a greater rate than expenditure, the household's disposable income was 3,860,000 KRW, up 10.0% compared to the same quarter last year. The surplus amount rose by 21.7% to 1,329,000 KRW.

The 'Equivalized Disposable Income Quintile Ratio,' which indicates income distribution, was 6.20 times, worsening compared to the previous quarter (5.71 times) but improving compared to the first quarter of last year (6.30 times). The government explained that due to seasonality and volatility, careful interpretation is necessary.

The Ministry of Economy and Finance gave a cautious assessment of the household trend survey results, stating, "Although income and distribution indicators have improved, considering the severe current economic situation, it is uncertain whether the improvement trend will continue." It added, "Despite difficult domestic and external conditions, efforts will be made to sustain recent improvements in income and distribution by creating private sector jobs and strengthening selective support focused on vulnerable groups," and "We will also make every effort to alleviate the increase in real household burdens caused by rising prices."

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