ajunews Wednesday,21 February 2024

Income disparity widens amid COVID-19 pandemic

By Park Yoon-bae Posted : January 3, 2023, 15:44 Updated : January 3, 2023, 19:44

[Gettyimages Bank]

SEOUL -- Households at the top 10 percent of the income bracket were found to earn 22 times more than what the poorest 10 percent made last year, according to Statistics Korea.

The finding indicated that the COVID-19 pandemic has widened the income disparity amid declining household income, especially among the poor, and growing financial difficulties among the self-employed. This also raised concerns that the middle class has been shrinking at an alarming rate.

The statistical office said in a recent report that the richest 10 percent earned an average yearly income of 154.65 million won ($122,233) in 2022, 22.7 times that of the poorest 10 percent which was estimated at 6.81 million won.

The report also said that the top 10 percent possessed an average of 988.24 million won in assets, compared with the bottom 10 percent’s 109.18 million won.

The office said that rich people enjoyed higher earned income and business income, while the poor depended more on transfer income such as pension and state livelihood support.

The Hyundai Research Institute said in a report that the proportion of the middle class over the entire population fell 3.1 percentage point to 44 percent in 2020 from a year before.

According to official statistics, the median income dropped from 1.77 million won in 2019 to 1.6 million won in 2020 due to the economic shock from the pandemic.

The social polarization is expected to deepen amid the crumbling middle class and the prolonged economic downturn, having an adverse effect on the country's efforts to speed up an economic recovery.

The think tank said that it is necessary to prevent the middle class from shrinking further to avoid social instability. It called on the government to stabilize the labor market and offer more job opportunities for the poor and underprivileged.

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