Financial assistance for low-income households increases 21% on-year
- 6 years ago
For the first time in 15 years,... the South Korean government's financial assistance for low-income households has surpassed households' earned income... amid the country's worsening job situation.
Won Jung-hwan reports.
Financial assistance surpassed average earned income for low-income households in the first quarter of 2018.
According to data from Statistics Korea on Tuesday,… financial assistance from the government for low-income households, those whose income was in the lowest 20 percent of households,... increased by over 21-percent compared to the previous year. Low-income households earned 440 U.S. dollars a month on average, but received an average of 555 US dollars in financial assistance.
This is the first time since 2003 that financial assistance for low-income households is higher than those households' earned income. This financial assistance includes government pensions and unemployment benefits.
But while the government has been expanding support for low-income groups,… the Statistics Korea report shows that low-income households saw their earned income drop by over 13-percent on-year due to the downturn in the labor market.
Some experts worry that if the gap between earned income and financial assistance for low-income households widens, it could lead to further socio-economic problems.
"If too much money is going to people who can work, for example the younger retirees or even younger people,... then they may get the idea that we don't have to work to earn money,... if that happens then we are going to see a lot of problems in the labor market."
The government has been trying to boost the economy by income-led growth policies such as raising the minimum wage and reducing working hours in order to help boost domestic consumption levels. But one expert claims this may not boost income levels in the long run.
"The problem with this policy though, is that you don't raise your labor productivity,... so in the end you are not going to raise income by much, you may reduce the size of recession, but it is very difficult to increase productivity and wages in the long run with this type of income support policies."
Amid an increase in the portion of elderly households and the worsening job market for temporary workers,... financial assistance could continue to make up the bulk of low-income households' average income for a while longer.
Won Jung-hwan, Arirang News.
Won Jung-hwan reports.
Financial assistance surpassed average earned income for low-income households in the first quarter of 2018.
According to data from Statistics Korea on Tuesday,… financial assistance from the government for low-income households, those whose income was in the lowest 20 percent of households,... increased by over 21-percent compared to the previous year. Low-income households earned 440 U.S. dollars a month on average, but received an average of 555 US dollars in financial assistance.
This is the first time since 2003 that financial assistance for low-income households is higher than those households' earned income. This financial assistance includes government pensions and unemployment benefits.
But while the government has been expanding support for low-income groups,… the Statistics Korea report shows that low-income households saw their earned income drop by over 13-percent on-year due to the downturn in the labor market.
Some experts worry that if the gap between earned income and financial assistance for low-income households widens, it could lead to further socio-economic problems.
"If too much money is going to people who can work, for example the younger retirees or even younger people,... then they may get the idea that we don't have to work to earn money,... if that happens then we are going to see a lot of problems in the labor market."
The government has been trying to boost the economy by income-led growth policies such as raising the minimum wage and reducing working hours in order to help boost domestic consumption levels. But one expert claims this may not boost income levels in the long run.
"The problem with this policy though, is that you don't raise your labor productivity,... so in the end you are not going to raise income by much, you may reduce the size of recession, but it is very difficult to increase productivity and wages in the long run with this type of income support policies."
Amid an increase in the portion of elderly households and the worsening job market for temporary workers,... financial assistance could continue to make up the bulk of low-income households' average income for a while longer.
Won Jung-hwan, Arirang News.