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The Korea Times, August 8, 2006
The income gap between the rich and the poor in urban areas grew its widest in six years in the second quarter of the year, the National Statistical Office (NSO) said Monday.
The NSO said that the top 20 percent of urban households earned 5.24 times more than those in the bottom 20 percent income bracket, the biggest gap since May 2000. The household income gap in urban areas had narrowed until the end of 2004, but rose again from the first half of 2005.
In addition to the widening income gap, a growing number of households are suffering deficits as their income is not large enough to cover growing living costs. It said 22.6 percent of urban households were in the red in the second quarter, up from 21.8 percent a year earlier. Nationwide, the ratio also rose to 27.8 percent from 26.8 percent.
The ratio goes higher for the low-income households. Among the bottom 30 percent of households nationwide, 50.2 percent couldn’t make ends meet, up 0.7 percentage points from a year earlier, the office said.
The widening income gap reflects worsening employment conditions for the low-income group. It also shows that the Roh Moo-hyun administration has failed to narrow the gap between the poor and rich, even though it has placed more emphasis on the redistribution of wealth than its predecessors.
"The income gap is expected to widen further in the future, given the greater number of jobless and low-income households in rural areas compared to urban areas," said NSO director general Choi Yeon-ok.
In the second quarter, urban household income increased 6.5 percent from a year ago to 3.3 million won. It is the fastest annual growth since the second quarter of 2002, when it was 9.6 percent.
The NSO said Korean household income, comprising urban and rural households, rose 4.8 percent annually, accelerating from a 4.4 percent annual gain a year earlier.
The average monthly income of households stood at 2.98 million won in the April-June period. The inflation-adjusted income growth was 2.4 percent in the second quarter, also higher than the 1.4 percent annual gain posted a year earlier, the report said.
The report showed that the income gap between the rich and poor Korean households didn’t narrow in the second quarter.
The income of the top 20 percent of households in the country was around 7.24 times greater than that of the bottom 20 percent in the second quarter, unchanged from a year earlier.
Average monthly household spending nationwide rose 4.5 percent in the second quarter to 2.03 million won, higher than the 5.4-percent rise the previous year.
The monthly income of urban households amounted to 3.31 million won in the second quarter, up 6.5 percent from a year earlier, according to the report.
Average monthly spending by urban households grew 5.8 percent to 2.11 million won, it said.
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