At the same time, urban residents see slightly less income disparity
The income gap between the richest and poorest households in South Korea is at its widest since 2003, when the nation began to compile related data. According to data released by the Korea National Statistical Office (NSO) on February 6, the average income of the upper 20 percent of the nation’s households was 7.64 times that of the bottom 20 percent in 2006, the widest gap seen since 2003. The average monthly income of the upper group was over 6.34 million won, a 5.8-percent increase from the previous year, while the lower group increased 4.6 percent to about 830,000 won. However, in terms of regular income, which excludes severance packages, inheritances, and other exceptional categories, the top 20 percent of households earned 7.42 times more than the lowest 20 percent, compared to the factor of 7.44 seen in 2005. South Korea’s Gini coefficient, an index showing uniformity of unequal distribution of income, was 0.351 last year, a sharp increase from 0.341 in 2003. As the Gini coefficient nears 1.0, the closer a nation is to "perfect" inequality. The NSO surveyed only households with two or more family members; if single-member households were considered, the income gap figures would likely show an even sharper division.The income gap among urban households, however, narrowed over the same period. The income of the top fifth of urban households was about 5.38 times greater than that of the bottom fifth last year, the first decrease in four years from the 5.43 figure registered in 2005. Overall, the large income gap in South Korea is due to the low economic performance of self-employed workers, the unemployed, and the elderly. The average age of a household member in the bottom fifth of earners was 53.8, nearly nine years older than the average urban household member. Given that nearly about 80 percent of South Koreans live in urban areas, this indicates that much of the nation’s poor population is elderly, said Kim I-tae, vice-director of the Ministry of Finance and Economy. In addition, the household income in the bottom fifth of earners increased only 3.6 percent from last year, compared to a 7.6-percent year-on-year increase seen in urban households. The government has been enforcing policies regarding the redistribution of income, but they are not sufficient to relieve income polarization, which has been rapidly progressing since the Asian financial crisis in the late 1990s. Please direct questions or comments to [englishhani@hani.co.kr]
