Income Reversal

This year is seeing an “income reversal,” in which household income of a worker in his late 40s surpasses greatly that of a worker in his early 50s.

This kind of income reversal is analyzed to have occurred with the growing number of honorary retirement of workers in their early 50s caused by corporations’ re-structuring.

According to reports on urban workers’ household economy released on Dec. 5 by the Korea National Statistical Office, people between the ages of 45 and 49 recorded the highest monthly average household income, of which the barometer is the household head’s age, marking 3.56 billion won in the third quarter of this year. The group was followed by people aged 40 to 44 making 3,417,677 won, 50 to 54 making 3,398,748 won, 35 to 39 making 3,192,045 won and over 55 making 3,085,260 won, respectively.

Monthly average household income in families headed by people aged 45 to 49 stood at 3,186,860 won in the fourth quarter of last year, lesser than 3,322,482 won earned by the group of 50- to 54-year-olds. Yet, the number went up to 3,462,862 won in the first quarter in 2004, surpassing 3,289,404 won of workers aged 50 to 54. In doing so, the group marked a record high for a third consecutive quarter

The group’s quarterly household income exceeded that of 50- to 54-year-olds for the first time in about two years since the first quarter in 2002 and marked a record high for three quarters in row for the first time in 30 months since the third quarter in 1992 to first quarter in 1993.

Some analyses have it that this year shows a markedly greater income reversal as never before seen among people in their late 40s and early 50s, helping the phenomenon to take deep roots in Korea.

Regarding this, the Korea National Statistical Office explained, “It was made possible due to people in or over 50 retired from their post in their first workplace and got another in a less-paying employer.”

Jong sik Kong kong@donga.com