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Study Shows Koreans Are Getting Poorer

Posted May. 25, 2006 03:58,   


With President Roh Moo-hyun leading the government, the number of households in the lower class increased, while the number of households in the upper class decreased.

According to analysis of household distribution according to income levels announced by the Ministry of Finance and Economy on May 24, among urban working families, the lower class was 13.8 last year in 2005, up two percent from the 2002 figure (11.8 percent) right before the beginning of President Roh’s government.

The lower class refers to the households with income less than 50 percent of the middle household income when all the households are ranked according to their incomes. The upper class refers to those with incomes higher than 150 percent of median income.

The rate of the lower class stayed at 11.8 percent during the years 2001 and 2002, but has been increasing since 2003.

With economic slump dragging on, income growth rate of each class is slowing down and the number of households with smaller incomes than median income is increasing.

The share of upper class was 21.8 percent in 2005, 1.3 percent lower than that of 2002 (23.1 percent). It’s staying on a downward slope with the rates being 22.7 percent in 2003 and 22.6 percent in 2004.

This is the result of a part of the middle class descending into the lower class and a part of the upper class into the middle class. This interpretation is supported by the fact that between 2002 and 2005 the rate of lower middle class decreased by 1.2 percent, while that of the upper middle class increased by 0.5 percent.

Lee Chan-woo, the head of the Welfare Economic Policy Division, explained that the readjustment of household debts since 2003 and the ongoing economic slump has weighed on the increase in the size of the lower class since 2003.

The monthly median income in 2005 was 2.864 million won. The monthly average income of an upper class household was 4.296 million won or above, that of a middle class family from 2.048 million won to 4.296 million won, and that of lower class below 1.432 million won.