Average Monthly Income '5,255,000 KRW'... Low-Income Workers' Earnings Down 3.4%

Statistics Korea Announces Q3 Household Trends Survey
Average Monthly Income Up 4.4% from Q3 Last Year
Top 20% Earn 8,024,000 Won in Labor Income
Bottom 20% Down 3.4% to 254,000 Won

Office workers commuting from Yeouido Bus Transfer Center in Seoul. Photo unrelated to the article content. Photo by Kang Jin-hyung

In the third quarter of this year, the average monthly household income increased by more than 4%, reaching 5,255,000 KRW. Even after accounting for inflation, there was a 2.3% growth. However, income growth varied by income bracket and income type, with the top 20% experiencing a sharp increase in earned income while the bottom 20% saw a decrease.

According to the 'Third Quarter Household Trends' report released by Statistics Korea on the 28th, the average monthly household income was 5,255,000 KRW, an increase of 222,000 KRW (4.4%) compared to the same period last year. Earned income rose by 3.3% to 3,329,000 KRW, and business income slightly increased by 0.3% to 987,000 KRW. Property income was 54,000 KRW and non-regular income was 102,000 KRW, with growth rates of 51.8% and 63.9%, respectively. Real income, adjusted for inflation, increased by 2.3%.

However, the growth rates differed by income type and quintile. Earned income for the top 20% (5th quintile) was 8,024,000 KRW, up 5%, while the bottom 20% (1st quintile) earned 254,000 KRW, down 3.4%. Business income also showed disparities, with the 5th quintile increasing by 1% to 2,234,000 KRW, and the 1st quintile decreasing by 8.6% to 121,000 KRW.

Regarding this, the Ministry of Economy and Finance explained, "Although earned and business incomes decreased in the 1st quintile due to an increase in elderly households, total income rose significantly due to a substantial increase in transfer income, such as strengthened basic livelihood security."

The average monthly household consumption expenditure was 2,907,000 KRW, a 3.5% increase over the same period. The main driver of this increase was spending on housing, water, and utilities, which rose by 12.6% to 327,000 KRW compared to the previous year. The share of these expenses in total consumption also grew from 10.3% in the third quarter of last year to 11.2%. Actual housing costs, such as monthly rent, increased by 18.4% to 126,000 KRW. Other notable increases in consumption were seen in other goods and services (9.0%), health (7.9%), household goods and domestic services (6.8%), recreation and culture (6.9%), and food and accommodation (5.6%).

Consumption decreased in transportation (-4.3%), communication (-3.6%), education (-1.3%), and clothing and footwear (-1.6%).

Non-consumption expenditures, which are not directly related to household consumption such as taxes and interest, increased by 0.5% to 1,068,000 KRW. Current taxes rose by 5.9% to 285,000 KRW, and pension contribution expenditures increased by 2.4% to 147,000 KRW. Interest expenses decreased by 9.9% to 116,000 KRW.

Disposable income, calculated by subtracting non-consumption expenditures from income, increased by 5.5% to 4,188,000 KRW. Accordingly, the household surplus (disposable income minus consumption expenditure) grew by 10.2% to nearly 1,280,000 KRW. However, the surplus also showed significant differences by income quintile. The 5th quintile households recorded a surplus of 3,936,000 KRW, up 15.8%, while the 1st quintile households were the only group to record a deficit, which decreased by 1.3% to 334,000 KRW.

The propensity to consume was 69.4%, down 1.3 percentage points from 70.7% in the third quarter of last year.