Average Monthly Household Income in Q2 Up 12.7%... Largest Increase Since Statistics Announcement

Announcement of 2022 Q2 Household Trends Survey Results
Average Monthly Income of Households with 1 or More Members: 4.83 Million KRW
Employment and Wages Increase, Service Industry Business Conditions Improve

In the second quarter of this year, the service sector's business conditions improved, and transfer income increased due to the supplementary budget, resulting in the largest-ever increase in average monthly income per household.

According to Statistics Korea's "2022 Second Quarter Household Trends Survey Results" released on the 18th, the average monthly income of households with one or more members nationwide in the second quarter of this year was 4,831,000 KRW, up 12.7% compared to the same period last year. This is the largest increase since statistics began in 2006.

The Ministry of Economy and Finance explained, "Market income increased due to factors such as employment growth, an increase in self-employed workers, and improvement in the service sector's business conditions," adding, "Transfer income also rose significantly due to the second supplementary budget." However, real income increased by 6.9% due to inflation and other factors.

Looking at income items, earned income, business income, and transfer income all increased significantly compared to last year. This was influenced by increased employment and wages, as well as improved income for self-employed workers due to the easing of COVID-19 social distancing measures. In particular, the government's strengthening of the social safety net and execution of the supplementary budget greatly boosted transfer income.

When households are divided into quintiles by income, income increased in all quintiles, with the first quintile (lowest 20%) showing the highest income growth rate. According to the Ministry of Economy and Finance, the income growth rates by quintile were 1st quintile (16.5%), 2nd quintile (13.1%), 3rd quintile (11.7%), 4th quintile (14.4%), and 5th quintile (11.7%).

In the first quintile, business income decreased (-19.6%), but earned income (47.3%) and transfer income (12.7%) increased significantly. This was due to an increase in temporary employment and expansion of public pensions and social benefits. In the fifth quintile, earned income decreased (-4.7%), but total income improved due to increases in business income (40.5%) and transfer income (108.4%).

The average monthly consumption expenditure per household in the second quarter was 2,619,000 KRW, up 5.8% (real consumption expenditure up 0.4%) compared to the same period last year. Expenditure increased significantly in clothing and footwear (12.5%), transportation (11.8%), recreation and culture (19.8%), education (11.1%), and food and accommodation (17.0%). However, expenditure decreased in food and non-alcoholic beverages (-1.8%), housing, water, electricity, and gas (-3.3%), and household goods and domestic services (-9.4%).

The Ministry of Economy and Finance explained, "Due to the lifting of social distancing measures, spending related to face-to-face activities increased, but high inflation caused spending on household goods, food, and alcoholic beverages to decrease."

The average monthly disposable income per household in the second quarter was 3,943,000 KRW, up 14.2% compared to the same period last year. The surplus amount was 1,323,000 KRW, an increase of 35.2%. The average propensity to consume was 66.4%, down 5.2 percentage points. Overall, as income increased, the proportion of deficit households decreased by 1.6 percentage points to 22.8%.

Although employment and business conditions showed improvement and income increased, the government stated that it recognizes the current economic situation, including income and distribution, with seriousness. The Ministry of Economy and Finance emphasized, "We will prioritize stabilizing people's livelihoods and strive to continuously improve income and distribution conditions by stabilizing prices to ease the burden on low-income households and strengthening employment and social safety nets for vulnerable groups."

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