Rising Living Costs Heighten Sense of Inequality

Official indicators of income disparity have improved, but the economic inequality felt by citizens has worsened compared to seven years ago, particularly among low-income single-person households burdened by high living costs. According to the Korea Institute for Health and Social Affairs (KIHASA), the public's subjective inequality perception score rose from 5.53 in 2016 to 6.21 in 2023.

According to a report published by KIHASA on June 19, 2024, the Gini coefficient based on disposable income fell from 0.353 in 2016 to 0.323 in 2023, indicating an improvement in income distribution indicators. Conversely, the subjective inequality perception score, which reflects how citizens feel about inequality, increased from 5.53 to 6.21 over the same period.

A clear tendency was observed where lower-income groups perceived income and assets as more unequal, a phenomenon particularly pronounced among low-income single-person households facing difficulties in managing expenditure burdens relative to their income. As of 2024, single-person households accounted for 1,397,000 households, or 74.2%, among recipients of the National Basic Livelihood Security program. The average monthly expenditure for single-person households was highest in housing, water, and energy (18.4%), followed by food and accommodation (18.2%), and food items and non-alcoholic beverages (13.6%). The proportion of households where food costs exceeded 20% of their income was 93.3% for the lowest income quintile (1st quintile) and 3.8% for the highest income quintile (10th quintile), indicating that the burden of essential living costs is concentrated among low-income individuals.

Koh Hye-jin, an associate research fellow at KIHASA, proposed policy alternatives such as expanding the scope of food voucher support and bolstering short-term liquidity support systems like the Emergency Welfare Support program.