Employees working for small and medium-sized enterprises (SMEs) in South Korea were paid, on average, 68.6 percent of the wages of their counterparts in large firms in 2017, a report showed on Jan. 10. Their disparity showed a slight improvement compared to a year earlier but there was still the polarization of SMEs and large companies.
A SME worker earned a monthly average of 3.35 million won (US$2,995) in 2017, while a large-sized company employee was paid 5.15 million won (US$4,598), according to the report titled “2018 SME Status Index” released by the Korea Federation of SMEs. The ratio SME wage to that of large firms stood at 64.1 percent in 2012 and 2013, 62.3 percent in 2014, 62 percent in 2015 and 62.9 percent in 2016 before slightly increasing to 68.6 percent in 2017. The average monthly wage is the total amount of income that includes regular pay, overtime pay and special pay.
However, the wage gap between SMEs and big companies widened in the manufacturing sector. The average monthly wage of a worker at a smaller manufacturing firm came to 3.34 million won (US$2,987) in 2017, which was 56.2 percent of 5.94 million won (US$5,312) at a large company. The wage ratio between SMEs and large firms in the manufacturing sector recorded at 54.1 percent in 2012, 53.8 percent in 2013, 53.2 percent in 2014, 54.5 percent in 2015 and 54.9 percent in 2016.
Meanwhile, South Korea had a total of 3.55 million SMEs as of the end of 2017, which accounted for 99.9 percent of the country's total business entities. The number of smaller commercial and industrial companies was 3.07 million, taking up 86.5 percent of the total. Smaller commercial and industrial companies refer to small firms with less than 10 full-time employees in the mining, manufacturing, construction and transportation industries and less than five full-time workers in other industries. The number of employees at SMEs and smaller commercial and industrial firms stood at 14.36 and 6 million, respectively, accounting for 82.2 percent and 34.4 percent of the country’s total workforce.