Household Income Decline

[Anchor Lead]

Heads of households in their 40s are regarded as the backbone of the Korean economy as they are typically the biggest earners and biggest spenders. Their income levels have declined for the first time ever since related data began being compiled, raising a red flag when it comes to the financial soundness of Korean households.

[Pkg]

Song Dong-il, currently in his 40s, has been in the restaurant business for over 20 years. He's troubled these days by slumping sales.

[Soundbite] Song Dong-il(Restaurant Owner) : "We used to have many customers in their 30s and 40s. The demographics have grown younger now, so our income is down by 20-30%."

The monthly business income of heads of households in their 40s like Song has dropped 5.9 percent year-on-year to around 830 US dollars. It's the first time ever that earnings by 40-something household heads have posted a drop. This is mainly attributed to a plunge in the business income of the self-employed amid the economic downturn. Decreased income among 40-something breadwinners also destabilizes the lives of other family members, potentially leading to household crises.

With their relatively stable income, breadwinners in their 40s are regarded as a backbone of the Korean economy, with their average household spending nearly double that of homes headed by people in their 60s. If they cut back on spending, overall public consumption drops and consequently production and investment take a downturn as well. Pundits have expressed concerns that this signals that Korea's economic doldrums are only accelerating.