Feb 21, 2014
South Korean household income grew 2.1 percent on-year in 2013 thanks in part to improved labor market conditions that led to more employment, a government report showed Friday, although the slow pace of growth suggests a lingering economic slump.
According to the report by Statistics Korea, the monthly income of households consisting of two members or more stood at an average of 4.16 million won ($3,875) last year, up from 4.07 million won tallied a year earlier.
Inflation-adjusted household income also inched up 0.8 percent over the same period.
The report attributed the increase to more people joining the workforce that resulted in better earnings by household members.
Last year, the jobless rate stood at 3.1 percent, down from the previous year’s 3.2 percent, and 386,000 jobs were added, slightly higher than the government’s initial projection.
The report showed that households’ earned income increased 2.8 percent on-year in 2013 to a monthly average of 2.76 million won. Households’ business income rose 0.4 percent to 857,500 won.
But the 2013 income growth rate is far lower than the 6.1 percent gain in the previous year, suggesting that the protracted slump in economic recovery might have affected their overall living conditions.
Household spending also increased, but the growth pace slowed.
Monthly consumption expenditures -- household spending on services and products that include daily necessities -- rose 0.9 percent to 2.48 million won in 2013, the report showed. The spending growth slowed from the 2.7 percent rise in 2012.
Non-consumption expenditures, which include payments on taxes, pensions and insurance, expanded 2.8 percent on-year to 781,000 won.
The report showed that households’ monthly disposable income -- total income minus non-consumption spending -- stood at 3.38 million won, up 1.9 percent from a year earlier. This followed a 6.4 percent increase registered in 2012.
Meanwhile, households’ "average consumption propensity" – the ratio of total consumption spending to disposable income – dropped to the lowest level, indicating that people tended to tighten their purse strings amid lingering worries over the economic slump.
The consumption propensity stood at 74.1 percent, down 0.7 percentage point from the previous year. This marked the third straight year that the figure has dropped on a year-on-year basis and also represented the lowest since related data started to be released in 2003.
Source: The Korea Herald