The nation's income gap between rich and poor urban households widened amid lackluster job growth and a slowing economic recovery, government data showed yesterday.
The National Statistical Office said the top 20 percent of Korean urban households earned 5.24 times more than the bottom 20 percent in the second quarter of the year, up more than 0.1 from the previous quarter.
"The depressed construction sector and less-than-expected recovery in service output seem to have widened the income gap," said David Kim, an economist at Woori Securities Co.
"Noneconomic factors such as walkouts and heavy rainfalls further worsened the situation."
While the top 20 percent urban households saw their average income expand nearly 8 percent in the second quarter, the average earning for the bottom 20 percent rose 5.7 percent, according to the NSO.
The income growth figures compare favorably with the 1.7 percent increase last year, but experts believe that the decelerating economic recovery did not help close the widening income gap.
In the second quarter, the economy grew 0.8 percent from the previous quarter, the slowest pace in more than a year, as heavier government regulations to cool the property market capped construction investment.
Service output, a leading indicator for the job market, also expanded 4.5 percent year-on-year in June, compared to the average 5.7 percent growth in the first six months of the year.
Data about the second poorest 20 percent bracket well demonstrated the worsening circumstances.
The NSO noted the average income of the second bottom 20 percent, which receive fewer government subsidies and is accordingly keenly sensitive to the job market, increased less than 4 percent in the second quarter.
Experts say the below-average increase shows that Asia's third-largest economy is not recovering fast enough to fully benefit the low-income households.
"The marginal increase of the second poorest class partly tells us that the income gap is not improving as we had hoped for," Kim said.
The nationwide income disparity including local households also remained largely unchanged at 7.24 from a year ago despite the government's increased spending on welfare and social security programs.
