Consumption inequality grows between rich and poor

The consumption gap is further widening between the rich and poor as income inequality and consumer prices rise.

Statistics Korea said Tuesday that the bottom 10 per cent of households by income concentrate their spending on daily necessities such as food and settling monthly utility bills.

Meanwhile, the top 10 per cent spend their wealth on education for their children, travel, entertainment and other cultural activities.

Groceries and nonalcoholic drinks accounted for more than 23 per cent of total spending by the lowest-income households last year, the statistics bureau said.

This is followed by expenditure on rent, utilities and health care. Overall, low-income families spent more than 50 per cent on food, housing bills and medical treatment.

In contrast, food and nonalcoholic beverages accounted for only 11 per cent of income spent among top income earners, followed by utility and housing fees at 8 per cent and health care at 6 per cent.

Transportation or travel spending including gas accounted for 14.4 per cent of the total, the biggest expenditure by high-income households last year.

Education for children and self-improvement followed, taking up 14 per cent of their spending, or about six times what the low-income earners spent in the category, the statistics bureau noted.

The wealthy spent about 8 per cent on clothes and shoes, or twice as much as the poor, and 7 per cent on entertainment and culture, or 1.6 times the low-income households' expenditure.

The growing consumption inequality is mostly attributable to the widening gap in income between the rich and poor, while the economic slowdown and rising consumer prices are further making low-income households tighten their spending.

The top 10 per cent earned an average of 9.2 million won ($10,499) a month, compared to about 902,000 won for the bottom 10 per cent bracket last year. In 2003 when the statistics bureau began recording the data, the top bracket earned 5.8 million won a month, while the lowest-income group earned 630,000 won.

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