Income growth of 20-30 group equals third of older workers`

A broadcast lighting technician earns 1.7 million won (1,601 U.S. dollars) a month. Hired as a non-regular worker, he is paid less than half of that of senior colleagues in permanent positions. Since the technician, 33, cannot make ends meet, he has delayed having a child with his wife.

Another man in his fifth year with a company said he felt deprived in his annual salary negotiations late last year. Senior staff in their 40s got pay raises of up to 11 percent, but those with less than five years of working there got just 5 percent or lower.

The income gap between younger and older workers is widening. According to Statistics Korea on Tuesday, households with two or fewer members and whose heads are younger than 40 earned a monthly average income of 4.07 million won (3,834 dollars) in the third quarter last year, up just 2.7 percent year-on-year. The group had the lowest income growth among all generations and their earnings were below average.

The monthly average income of households headed by those in their 40s rose by 7.4 percent, while that of households headed by 50-somethings increased by 8.4 percent. Households headed by those aged 60 or older saw a 6.9-percent rise.

This trend has continued over the past three years. Based on third-quarter data, the monthly income growth of households headed by 20- and 30-somethings has remained below that of people in their 40s and 50s over the three-year period.

The lower income growth in households headed by 20- and 30-somethings is due to companies reducing payroll amid the economic downturn. More retirees and housewives are starting their own businesses or seeking re-employment, which also bodes ill for the younger generation.

Lee Geun-tae, a researcher at LG Economic Research Institute, said, "When companies have it tough, they tend to reduce hiring rather than promote restructuring. The economic slowdown hurts the younger generation the most. This is the global trend."

The monthly income growth of households headed by 40- and 50-somethings has remained at the level of 7-8 percent after bottoming out at the end of 2010. Retirees and housewives entering the job market boosted this trajectory.

Lee Jun-hyeop, researcher at Hyundai Research Institute, said, "Younger people are reluctant to enter the job market for fear that if they start out with low-quality jobs, they could be stuck there. More quality jobs should be created by upgrading the added value of industries to resolve this problem."

nuk@donga.com