12 Percent of Poor Households Led by College Graduates

By Lee Hyo-sik
Staff Reporter

A growing number of households headed by individuals with university degrees or higher has fallen into poverty amid worsening job market conditions, following the unprecedented worldwide economic crisis, Hyundai Research Institute (HRI) said Sunday.

Many salaried workers have lost jobs over the past year, with companies downsizing their workforce to cope with plunging sales at home and abroad, while the self-employed went out of business as a result of slumping private consumption.

The think tank said the number of families in poverty reached 2.57 million across the country in 2009, up 70,000 from 2.5 million the previous year. It accounted for about 15.2 percent of Korea’s 16.92 million households.

In particular, families supported by university graduates or people with master’s and Ph.D. degrees accounted for 11.7 percent of the entire poverty-stricken households, up sharply from 9.4 percent in 2008 and 9.1 percent in 2006.

``With an inadequate social safety net, many middle-class families fell into poverty as their breadwinners became jobless due to the global economic downturn in late 2008. Household income has been either stagnate or declining over the past year amid the tight labor market,’’ HRI research fellow Lee Boo-young said.

Lee said local companies downsized their labor force and cut employee salaries and benefits to deal with deteriorating business conditions at home and overseas, which hit the household sector hard. They have also become reluctant to hire new employees, making university graduates and their families poorer.

``Many shop owners and other independent business operators sustained huge losses, following the world economic slump, as consumers here tightened their purse strings to ride out the financial hardship,’’ he said.

The institute also said more double-income families fell into poverty as both husbands and wives entered the job market to improve household finances. They took up 11.5 percent of the entire impoverished families in 2009, up from 4.3 percent in 2006.

About 42.6 percent of poor households were senior citizens living alone last year, up from 35.1 percent four years ago, it said, indicating that the government should do more to improve the livelihoods of the growing elderly population.

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