National Statistical Office, 1st Quarter Household Trend Survey
In the first quarter of this year, when Corona 19 was virtually over, high-income people opened their wallets to buy cars, and low-income people significantly increased their children’s education expenses. As electricity and gas rates have risen significantly, the burden of public utility bills on low-income households has increased to the point of accounting for a quarter of monthly expenses.
Consumption recovery by high-income class, new car purchase
According to the 1st quarter household trend survey by the National Statistical Office on the 28th, the 5th quintile, the top 20% of income, saw a 76.4% increase in spending on transportation compared to the first quarter of last year. In particular, actual spending on car purchases increased by 184.1%. Transportation spending in the bottom quartile (the top 21-40% of income earners) also increased by 9.9%. On the other hand, expenditure decreased all at once, recording -7.5% for the first quintile, the bottom 20% of income, -37.0% for the second quintile (lower income 21-40%), and -2.8% for the third quintile (top 41-60% income). This means that the consumption recovery of the high-income class with ample financial situation began with the purchase of a new car.
Children from low-income families who go back to private academies
While spending on entertainment and culture increased all at once due to an increase in outside activities, the first quintile, the low-income group, increased their education spending by 35.1% compared to last year. On the other hand, education spending in the fifth quintile increased by only 1.6%, 9.9% in the 4th quintile, and 6.5% in the 3rd quintile. The 2nd quintile was -18.0%, showing a reduction in educational expenses. When Corona 19 spread, the low-income class cut off tuition to reduce the burden of household spending, but the high-income class continued to spend on education out of fear of a gap in educational attainment.
One-fourth of low-income households’ spending is ‘utility bills’
Looking at the composition of consumption expenditure by income quintile, the item in which the first quintile spends the most is ‘housing, water supply, and light heating’ (305,000 won), accounting for 23.1% of monthly expenditure. This means that low-income households spend a quarter of their monthly income on utility bills. The 2nd quintile also spent the most of their monthly expenses, 19.4% (353,000 won), on public utility bills. In the future, it is expected that the burden of public utility bills will increase even more for low-income households due to the increase in electricity and gas prices.
The 3rd and 4th quintiles, which are classified as middle class, spent the most on food and lodging at 16.0% and 15.7%, respectively. It means that I focused on going on a trip that I couldn’t do due to Corona 19.
Reporter Sejong Lee Young-joon
2023-05-28 10:47:22
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