Korean Companies Have Lower Labor Costs

The competitive-wage power of Korean companies is climbing above other competing countries including Taiwan stemming from recent wage cuts and the devaluation of the won.
The Bank of Korea (BOK) revealed on January 6 that labor costs per one unit of product decreased by 45.8 percent in the first half of last year.
In the same period, that of Taiwan fell by 14.5 percent, followed by Japan at 7.1 percent and the U.S.' 1.3 percent drop.
The average wage in Korean manufacturing industries was higher than that of Taiwan from 1994 to 1997 but, from the first half of 1998, it plunged to 4.3 dollars per hour, which is only 70 percent of Taiwan's 6.1-dollar hourly wage.
Compared to the U.S. which pays workers an average of 13.4 dollars per hour and Japan's manufacturing workforce which garners 14.7 dollars per hour, Korea's average wage is only 30 percent of these countries.
A source at the BOK said, 'This fall in labor cost is based on the weak won and wage cuts. So, companies should raise their competitive power through the improvement of product quality and investment expansion.'