SEOUL, July 22 (AJP) - South Korea’s top-income urban households gained purchasing power in the first quarter as public and private transfers increased, while real incomes fell across the remaining 80 percent amid weaker employment and business earnings.
Real income, which adjusts household income for inflation, declined from a year earlier in each of the bottom four income quintiles, according to Ministry of Data and Statistics figures available through the Korean Statistical Information Service, or KOSIS.
Only the highest-income 20 percent recorded an increase.
It was the first time since the second quarter of 2023 that real income had fallen simultaneously across the bottom 80 percent of urban households. The top quintile also recorded a decline during the earlier period.
Average monthly real income for the top quintile rose 1.6 percent, or 163,368 won, from a year earlier.
The fourth quintile, immediately below the top-income group, suffered the steepest decline at 2.3 percent, or 130,585 won a month.
Real income fell 1.7 percent in the second quintile, 1.5 percent in the third and 1.3 percent among the lowest-income fifth.
Weaker employment and business earnings weighed on the four lower groups.
Employment income dropped 8.2 percent in the bottom quintile, 6.8 percent in the second and 7.3 percent in the fourth.
The middle quintile recorded a 0.3 percent increase in employment income, but business income fell 12.5 percent, leaving its overall real income lower.
Income earned from work, businesses and assets also remained weak among the top quintile.
Its employment income rose just 0.8 percent, while business income fell 6.3 percent and property income declined 11.8 percent.
Transfer income instead rose 24.6 percent to an average of 1.12 million won a month.
Public transfers increased 9.4 percent. The category includes contributory pensions such as the national and private-school pension schemes, which are not limited to low-income households, as well as government benefits.
Private transfers surged 69.1 percent and include money received from relatives or other households, such as living expenses, allowances and family support.
The ministry said transfers often rise during the first quarter as families exchange money around the Lunar New Year holiday.
Among top-income households, the increase reflected larger amounts being transferred rather than a sharp rise in the number of recipient households, according to the ministry.
The pattern was different for the bottom quintile, where transfer income accounted for 63.6 percent of total income but fell 1.1 percent as public transfers declined 3.2 percent.
Employment income for the group also dropped 8.2 percent.
The urban breakdown contrasted with the nationwide average released in May.
Average monthly income among all households rose 2.4 percent from a year earlier to 5.48 million won, while real income increased 0.4 percent.
Four of the five urban income groups nevertheless recorded lower real income, while the gain among the top quintile came mainly from public and private transfers rather than stronger employment, business or property income.
Income inequality also widened.
After adjusting for household size, disposable income among the top 20 percent was 6.59 times that of the bottom 20 percent, up from 6.32 times a year earlier.
The ministry cautioned that quarterly household income can fluctuate because of seasonal factors such as holiday transfers and corporate bonuses, and said longer-term changes should be assessed alongside annual household surveys.
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