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Three Out Of 10 Households Were In the Red Last Year

Posted February. 24, 2005 22:34,   


Last year, the gap between the high-income bracket and its lower counterpart widened to the greatest extent in five years. In addition, the burdens of paying for taxes, the national pension, and health insurance increased significantly, while three out of 10 households nationwide were in the red with higher expenditures than incomes. According to the “2004 Household Balance Trends,” released on February 24 by the Korea National Statistical Office (KNSO), the income gap between the top 20 percent and the lowest 20 percent was the highest, 5.41 times, since 1999, when the rich were wealthier by 5.49 times.

On this, the KNSO explained, “It is because as the number of unemployed, temporary workers, and daily workers has increased among those with low incomer, their incomes have decreased.” The average monthly income of a family of more than two last year increased by 6.0 percent to 2.806 million won. However, considering the rate of increase of consumer prices, real income rose only 2.3 percent to 2.446 million won.

On the other hand, non-consumption expenditures such as taxes and pension payments increased 15.3 percent. The rate of increase dropped from 11.9 percent in 2001 to 1.0 percent in 2002, year-on-year, skyrocketed to 11.3 percent in 2003, and increased more last year.

The average household expenditure per month increased 6.8 percent to 2.303 million won from the previous year’s 2.157 million won. Considering the rate of increase of consumer prices, the increase in consumer expenditure was 1.711 million won, a mere 1.7 percent increase. Nationwide, 28.8 percent of households were in the red, spending more than their disposable income, and of the 30 percent of lowest incomes, more than half, or 52.7 percent, had a deficit.

The monthly income on average for metropolitan workers nationwide was 3.113 million won, an increase of 5.9 percent from the previous year’s 2.94 million won. Their expenditures increased to 2.434 million won, which is a 6.7 percent increase. The rate of increase of last year’s income for urban working families was 5.2 percent, the lowest since 1999, when it was 3.2 percent.

Chi-Young Shin higgledy@donga.com