South Korea’s low-income households were hit hardest by the economic fallout from the novel coronavirus outbreak in the first quarter of this year, data showed Sunday.
According to a report from Statistics Korea, average household income for the bottom 10 percent bracket stood at 959,019 won ($773.09) per month, having shrunk by 3.6 percent on-year. Wages earned by the bottom 10 percent income bracket declined by nearly one-third to 165,966 won. For the country as a whole, however, average household income rose by 3.7 percent from a year earlier to 4.76 million won per month.
Experts say the economic shock of the COVID-19 pandemic took a bigger toll on low-income families as the number of low-paying temporary jobs sharply declined. The number of employed people posted 26.6 million in April, down 476,000 from a year earlier, and over 587,000 jobs were lost by temporary and daily workers.
“Even though the government funneled cash into low-income families through various relief measures, heavy job losses for low-wage workers led to a notable reduction in their earned income in the first quarter,” said Sung Tae-yoon, an economics professor at Yonsei University in Seoul. For the lowest bracket, income earned from government assistance increased by 11.1 percent in the cited period to record nearly 500,000 won -- almost triple the average earned income.
Shrinking wages for low-income households widened the income disparity. The income of the richest 10 percent was nearly six times higher than that of the poorest 10 percent.
In addition, the average monthly income of the bottom 10 percent bracket plunged by 3.6 percent, while that of the upper 10 percent bracket gained 7 percent from a year earlier, data showed.
“Even after the coronavirus outbreak slows down sometime in the near future, declining output in the service industry will continue to worsen the unemployment issues as well as the income gap between the rich and poor here,” said Cho Young-moo, a researcher at the LG Economic Research Institute.
The county’s overall industrial output in the service sector plunged 4.4 percent in March from a month earlier, mainly due to sluggish private consumption as well as sluggish exports, Statistics Korea said.
By Choi Jae-hee (email@example.com