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[이데일리 이윤화 기자] The aftermath of the social distancing caused by Corona 19 was found to have left a big scar on not only self-employed and small business owners, but also wage workers. The longer the period of social distancing measures and the higher the adjustment, the lower the real wages paid to wage workers.
On the 1st, the Bank of Korea estimated the potential wage loss rate due to social distancing last year at 7.4% in a report on’The Spread of Corona 19 and the Impact of Social Distancing on Wage and Income Distribution’. This is an estimate of the cumulative effect of social distancing under the premise that the first stage of social distancing was implemented for 5.5 months, the second stage was 3.5 months, and the 2.5 stage was implemented for 1 month in March-December 2020.
The statistical office’s household trend survey, taking into account the government’s financial support, also showed that the average wage loss rate in the second and third quarters of last year was 3.1%. In particular, as of the third quarter of last year, when the impact of the re-proliferation of Corona 19 was affected, the earned income of Korean households decreased by the largest ever since the same quarter.
According to Statistics Korea’s’Family Trend Survey Results for the 3rd Quarter of 2020,’ earned income in the third quarter of last year was 3477,000 won, a decrease of 1.1% from the same period last year. This is the largest reduction since the 2003 statistics were prepared.
It is the first time in history that earned income decreased for two consecutive quarters from the second quarter (-5.2%) to the third quarter. Even with the government’s countermeasures for job support by trillions of dollars, such as employment maintenance subsidies, it was not enough to prevent workers from hitting wages. According to the Ministry of Employment, as of the end of December of last year, the cumulative payment of employment maintenance support amounted to 2,277.8 billion won (about 72,000 places).
It was found that as the enforcement of social distancing due to the re-proliferation of Corona 19 prolonged and the stage became stronger, the income distribution imbalance and polarization intensified along with the decrease in workers’ wages. Assuming that the quarantine measures were implemented for one month, the wage loss rate increased to 0.5% for the first stage, 0.9% for the second stage, 2.3% for the 2.5 stage, and 2.6% for the third stage.
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In particular, the labor supply of the low-income class was more severely restricted than the high-income class, which worsened the income distribution. When the three-stage level of social distancing is implemented for one month, the Gini coefficient (1st step 0.0005 → 3rd step 0.003) and poverty index (1st step 0.13 → 3rd step 3.08) also increased. It is estimated to increase by 0.009 points and 6.4 percentage points, respectively, on an annual cumulative basis.
The Gini coefficient is expressed as a number between 0 and 1, which means that the higher the value, the greater the income inequality. The poverty index represents the share of less than 60% of median income (poverty line) in the wage distribution.
The effect of restrictions on labor supply by the blockade was discriminated by income class. The workability index for each income quintile was 0.31 for the first quartile, 0.35% for the second quintile, 0.42 for the third quartile, 0.44 for the quartile, and 0.49 for the fifth quintile.
The potential wage loss rate for each income quintile was 4.3% in the first quintile, 2.9% in the second quintile, 2.2% in the third quartile, 2.1% in the quartile, and 2.6% in the quintile. The wage loss rate of the income quintile was 2.6%, which was higher than the third and fourth quintiles, because the proportion of regular workers in the fifth quintile was low and the proportion of high-income non-wage workers was high.
By individual characteristics, men (2.7%) with a low workability index during the blockade were more likely to lose wages than women (2.4%). By employee status and academic background, temporary and daily workers (6.4%) and non-wage workers (5.5%) earned higher wages than regular workers (0.8%), while those with lower education (4.1%) graduated from university (2.1%) and graduate school (0.5%). The loss rate was even higher.
An official from the Bank of Korea said, “This report is the first case to empirically analyze the impact of quarantine measures on wage and income distribution.” According to the results of a survey that shows that the degree of wage damage of workers is discriminatory, it is selective ( targeted) policy support seems to be effective.”