Wage hikes on the rise, especially at smaller firms

Nine out of 10 Korean companies offered pay raises during wage negotiations this year, compared with eight out of 10 last year, the Ministry of Labor said yesterday.
Out of 779 companies that reached wage agreements in the first quarter, 8.9 percent, or 69 companies, froze the salaries, and 1 percent, or eight firms, reduced them. The remaining 702 companies agreed to offer raises.
During the same period last year, 20.4 percent of the companies polled froze annual salaries while only 0.4 percent reduced them.
Companies with fewer than 300 employees provided the biggest raises, at 5.8 percent, followed by 5.5 percent from firms with 300 to 499 workers. Businesses with more than 5,000 employees were stingiest, offering 3 percent raises.
In the industrial sector, workers at firms devoted to entertainment, culture and fitness saw the largest average pay raises, at 7.6 percent on average. Next were service, health care and social welfare businesses, at about 6 percent, followed by accommodation and restaurant businesses at 5.5 percent.
In a recent poll conducted jointly by the online job agency Incruit and a Web-based pay information provider, Open Salary, 64 percent of 87 large-sized companies surveyed said they would raise annual wages for entry-level workers. Thirty-six percent planned a freeze and none said they would lower the amount.
Earlier this year, Korean business lobby groups indicated that the country’s entry-level workers at larger companies earned more than those in Japan.

By Seo Ji-eun Staff Writer [spring@joongang.co.kr]