Earned Income Drops Most in 3 Years... Income Gap Narrows

Statistics Korea, 1st Quarter Household Survey
Real Wage Income Drops Most in 7 Years

In the first quarter of this year, earned income decreased at the largest rate in three years due to a reduction in bonuses.

According to the 'Household Income and Expenditure Survey' released by Statistics Korea on the 23rd, the average monthly earned income per household in the first quarter of this year was 3,291,000 KRW, a 1.1% decrease compared to the same period last year. This is the largest decline since the first quarter of 2021 (-1.3%).

Earned income refers to money earned from work, such as salaries and bonuses. Statistics Korea analyzed that the decrease in earned income was "due to reduced bonus payments caused by worsening corporate management amid economic downturn."

During the same period, business income increased by 8.9% to 875,000 KRW, and transfer income rose by 5.8% to 818,000 KRW. With the increase in business and transfer incomes, the average monthly household income was 5,122,000 KRW, up 1.4% compared to the previous year.

However, since income growth was less than the rise in inflation, real earned income decreased by 1.6%. This decline is the largest since related statistics began being compiled in 2006.

Income disparity appears to have narrowed. The average monthly household income of the bottom 20% income group (1st quintile) increased by 7.6% to 1,157,000 KRW. In contrast, the income of the top 20% (5th quintile) decreased by 2.0% to 11,258,000 KRW.

Household expenditures rose by 2.5% compared to a year ago, reaching 3,984,000 KRW. Both consumption expenditure (2,908,000 KRW; 3.0%) and non-consumption expenditure (1,076,000 KRW; 1.2%) increased. Specifically, expenses increased in food and non-alcoholic beverages (7.2%), food services and accommodation (5.8%), and recreation and culture (9.7%), while decreasing in transportation (-1.0%), other goods and services (-0.6%), and communication (-0.7%).

Disposable income increased by 1.4% year-on-year to 4,046,000 KRW. The surplus amount decreased by 2.6% to 1,138,000 KRW.