Per Capita Income at $40,000?..."I Don't Make That Much," Why the Disconnect

[Anchor]

South Korea's economy grew at its fastest pace in 47 years during the second quarter. Gross national income per capita is also projected to surpass 40,000 dollars for the first time in history. The problem is that despite this economic growth, the actual lives of the public have not improved.

Reporter Kim Beom-joo examined why this gap exists.

[Reporter]

Our economic report card for the second quarter looks stellar.

Nominal GDP increased by 26.4 percent from last year, marking the highest growth in 47 years since 1979 under former President Park Chung-hee, a record not seen since that era.

Gross National Income (GNI), which represents the total earnings of corporations and individuals worldwide, also grew by 15.6 percent, achieving another record high not seen in 38 years since the Olympic year of 1988. This was driven by robust exports, centered around semiconductors.

The Bank of Korea analyzed that if current trends continue, per capita national income will reach 40,000 dollars this year for the first time.

That is good news.

However, with 40,000 dollars translating to about 53 million won in Korean currency, many people probably wonder why the average is so high when they do not earn nearly that much.

The term national income can be misleading; it is actually calculated by combining the money earned by individual citizens, corporate earnings, and tax revenues collected by the government.

So, how much of that money actually goes into the pockets of individual citizens? Just a little over half, at 55.5 percent.

Back in 1975, when this statistic was first compiled, for every 100 won the nation earned, citizens took home 77.5 won, or nearly three-quarters. Over time, however, the proportion taken up by corporations and the government has increased, meaning the share coming directly to the public has decreased accordingly.

The Bank of Korea stated that if large corporations release funds through dividends and performance bonuses, consumption is expected to increase.

[Interview / Kim Hwa-yong / Head of National Accounts Department, Bank of Korea: Government income, such as corporate tax, earned income tax, and dividend income tax, is also increasing, which is expected to lead to an boost in domestic demand with a time lag.]

However, it is time to give more thought to how to evenly spread warmth across the entire domestic economy.

Furthermore, since overall income has indeed increased, there is a high possibility that it could stimulate inflation and, by extension, housing prices, leaving policymakers with another set of homework.

(Video Editing: Yeojin Ahn, Design: So-jung Lee)
※ Please note: This article was translated by AI and may contain errors.