Wage Imbalance
On September 13, the Korea Small Business Institute (KOSBI) released a report on the wage gap by company size. According to the report, the average monthly salary of employees working for South Korean companies was US$3,164 in 2016 and this amount was equivalent to 77.4% of the average monthly salary of American employees and 92.6% of the average monthly salary of Japanese employees for the same period.
When it comes to the category of companies with less than five employees, the average monthly salary in South Korea was equivalent to no more than 53.6% and 75.9% of those in the United States and Japan, respectively.
On the other hand, as far as companies with at least 500 employees are concerned, that in South Korea was equivalent to 131% and 151.9% of those in the U.S. and Japan, respectively. Besides, the average monthly salary of South Koreans working for companies with at least 500 employees was equivalent to no less than 320% of the average monthly salary of South Koreans working for those with less than five employees.
The problem is, the wage gap is widening and is showing no signs of narrowing. “According to the NLI Research Institute in Japan, such a wide gap can be attributed to large lump sum payments from large corporations and unionized workers in such corporations who have successfully maintained their bargaining power,” the KOSBI said, adding, “One of the other factors is the high starting salaries large South Korean companies pay in order to recruit more talents.”