Average household income in South Korea fell for the first time in four years in 2020 and the wealth gap between the top and bottom 20 percent widened by five times as the impact Covid-19 dealt heavier on the lower-income class.
According to a report by Shinhan Bank on Tuesday, average monthly income per household stood at 4.78 million won ($4,298.5) in 2020, down 1.6 percent from a year ago.
Monthly household income had been on a steady growth from 4.61 million won in 2016, 4.62 million won in 2017, 4.76 million won in 2018 and 4.86 million won in 2019, but it declined for the first time last year.
Poor people were hit harder with the income of the bottom 20 percent fell more than three times faster at 3.2 percent than the top 20 percent households at 0.8 percent. The rich 20 percent earned 4.9 times more income than the bottom 20 percent last year, widening the income gap that had narrowed from 5.2 times in 2017, 4.83 times in 2018 and 4.76 percent in 2019.
Average households spent 2.4 million won or 50.2 percent on ordinary consumption. They spent more on food, rent, medicines and medical supplies but less on leisure and entertainment.
Debt repayment grew from 410,000 won on average per month in 2019 to 430,000 won in 2020, and debt payment ratio against income also increased from 8.4 percent to 9 percent.
Monthly savings and investment spending dropped 80,000 won from a year ago to 1.09 million won, accounting for 22.8 percent of their income. It was the lowest in 2016, but investment spending took up 10.1 percent or 110,000 won, jumping from 6 percent or 70,000 won a year ago.
Average household assets amounted to 438.1 million won, up 4.3 percent from a year earlier.
Assets held by the top 20 percent households grew 4.6 percent to 1.24 billion won, while assets owned by the lowest quintile increased a mere 0.5 percent to 27.15 million won and those of the second quintile decreased 1.2 percent to 135.2 million won.
Real estate assets took up the biggest share of 78 percent, followed by financial assets at 14.7 percent and other assets 7.3 percent.
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