Posted on : Dec.7,2006 14:07 KST
Middle class shrinks as top earners gain, lower class see wages shrink
The government admitted that the nation is suffering from depression and that business conditions felt by the general public are bleak, but a government report at the same time confirmed that households earning more than 5 million won (US$5,400) monthly have increased considerably this year.
According to data published by the National Statistical Office (NSO) on December 6, out of urban households with more than one family member, those whose monthly income was about 5 million won this year was 14.6 percent of all households, or one household out of seven.
In comparison, the number of households with earnings over 5 million won was 9.7 percent in the third quarter in 2003, 12.0 percent in 2004, and 12.7 percent in 2005.
The reason why there is a increase in high earners is because of the polarization of income, experts say.
The monthly income of the nation's households increased 3.7 percent on average during the third quarter this year. However, by income bracket, the upper 20 percent of earners increased by 5.3 percent, while the lower 20 percent decreased by 1.6 percent. The average income of all households overall has increased every year, following the continued increase in economic growth, but the income of the upper class has increased more than the average, while that of the lower class has decreased or has remained stagnant.
Among urban dwellers, the number of households with monthly incomes of less than 1 million won has increased to 10.7 percent this year from the previous year's 10.1 percent. In contrast, the number of households whose monthly income is between 1-3 million won has seen a downward curve. On a whole, the middle class has shrunk, while the upper class and lower class have grown.
As for households earning more than 5 million won every month, the heads of these families are 45-46 years old on average and there are an average of 3.7 members of each family.
Families whose monthly earnings are between 5-5.5 million won spent 3.25 million won on consumption and 880,000 won on items such as taxes and insurance, recording a surplus of about 1.1 million won each month. The highest-income group, which earns over 6 million won a month, spent 1.25 million won on non-consumption items such as taxes, spending 4.26 million won on consumption, posting an average surplus of 2.75 million won. Thus, these households earn about 100 million won every year, and save over 30 million won out of this.
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