Prospects await a Lotte Mart department to open in Seoul, Thursday. Yonhap
Baik Seung-ki, a salaried employee in his 40s, says his month-to-month earnings has risen steadily over the previous couple of years, however the quantity left for spending is rising at a slower tempo after overlaying his fundamental residing prices.
“I assume it’s due to unavoidable prices like taxes, social insurance coverage, utilities and staple meals are rising quicker than my earnings, shrinking the cash I’ve out there for financial savings or different discretionary spending,” he stated.
Baik’s view aligns with the info launched by the Federation of Korean Industries (FKI) Thursday, which reveals that mounted baseline bills outpaced wage progress from 2020 to 2025, including to the monetary pressure on so-called “glass-wallet staff.”
In Korea, “glass-wallet staff” are salaried staff whose earnings is absolutely clear to the federal government and topic to payroll tax deductions, not like self-employed people or enterprise homeowners.
Throughout this era, common month-to-month wages rose at an annual charge of three.3 %, from 3.52 million gained ($2,380) to 4.15 million gained.
Against this, earned earnings tax and social insurance coverage contributions deducted from paychecks elevated at an annual charge of 5.9 %, from 448,000 gained to 596,000 gained.
Because of this, the mixed share of earned earnings taxes and social insurance coverage contributions in wages elevated from 12.7 % to 14.3 %, constraining take-home pay progress to 2.9 % yearly and leading to a last 2025 month-to-month web earnings of three.55 million gained.
“With take-home pay rising simply 2.9 % whereas wages climb 3.3 %, it’s no marvel many staff really feel their paychecks aren’t stretching so far as they used to,” stated Shin Se-don, professor emeritus of economics at Sookmyung Ladies’s College.
The FKI information additionally confirmed that rising costs for groceries and different important residing prices — growing a mean of three.9 % yearly from 2020 to 2025 — have reduce into the cash that staff really feel they’ve out there for each day bills.
By class, the largest will increase had been in water and utilities at 6.1 %, meals and nonalcoholic drinks at 4.8 %, eating out at 4.4 %, transportation at 2.9 % and housing at 1.2 %.
At a extra detailed stage, 17 of 23 gadgets skilled value will increase that outpaced the three.3 % wage progress, with notably steep rises in refined oil merchandise at 10.6 %, gasoline at 7.8 % and electrical energy at 6.8 %.
“These bills are troublesome to chop again on and subsequently go away little room for discretionary spending, including to the monetary strain on glass-wallet staff,” Shin stated.
Moreover, the professor famous {that a} weakening of the Korean gained, together with the federal government’s fiscal stimulus coverage, is additional eroding staff’ spending energy.
He defined that the native forex has hovered over the regarding 1,400 gained per greenback stage, growing the price of important imports like crude oil and contributing to cost rises throughout a broad spectrum of products.
Relating to fiscal stimulus, the professor added that costs are additionally rising attributable to an ample move of money, together with 13.2 trillion gained in voucher-based handouts and coupons meant to spur spending within the second half of the yr.
