Corporate income rising faster rate than household incomeUpdated: 2014-09-04 17:59:27 (KST)
Despite the need to boost domestic demand, Korean consumers are not earning enough to increase spending as the corporate sector is sucking up an increasingly large share of the wealth generated by the country.
Although it's a global trend that households face an uphill battle against corporations in terms of their portion of a national income, the gap between the two sectors is widening much faster in Korea, according to data released on Thursday by the National Assembly's budget office.
Households accounted for just over 62 percent of Korea's gross national income in 2012, down more than 8-percentage points from 1995.
That pace of loss is twice as fast as the OECD average.
On the other hand, Korea's corporate sector increased its share of GNI by nearly seven percentage points over the same period --- four times higher than the OECD average.
The parliamentary office attributed the fast decrease in the Korean households' share to poor performances by smaller, non-corporate businesses and dwindling interest income.
Bank of Korea figures show that households' net interest earnings fell more than 75 percent to 4 billion dollars over the last decade, when the corporate sector shed its interest burden by about 55 percent.
To help increase the share of household income, the government is drawing up a package of measures that include revisions to the tax law, but some experts say encouraging investments should also be part of the plan.
"To facilitate domestic spending, policies that encourage hiring or wage hikes should be promoted, so that households actually gain disposable income."
The Park administration has emphasized that boosting domestic demand is at the heart its policies to revitalize the economy.
Song Ji-sun, Arirang News.
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