KCCI sanguine on prospects for 2015 worker raises

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KCCI sanguine on prospects for 2015 worker raises

The human resources departments of Korea’s largest companies expect to offer an average 3.9 percent salary raise to employees this year, slightly lower than last year’s 4.1 percent raise.

The Korea Chamber of Commerce and Industry (KCCI) released a report Wednesday on the results of a survey of 300 human resources directors at companies with a unionized workforce.

The employers want an average raise of 3 percent and labor unions seek an average 5.8 percent raise, the KCCI report said. That looks to the chamber like a 3.9-percent average wage increase, although neither employers nor employees would be inclined to agree right now.

Those figures are all modest when compared to the announced figures demanded by the business and labor groups that will sit across the table from each other. The Federation of Korean Trade Unions wants a raise of 7.8 percent, and the more aggressive Korean Confederation of Trade Unions demanded a flat fixed raise of 230,000 won ($202) monthly. The Korea Employers Federation has proposed a raise of only 1.6 percent this year.

“The government is pushing for wage increases as a way to stimulate domestic consumption,” the KCCI report said, “but in fact, this year’s increase will be similar to last year’s [4.1 percent] because the employers don’t have much room for raises with slack exports and domestic sales.”

Despite the differences in the management and labor positions, the survey showed employers aren’t expecting a wave of strikes. But the negotiations may drag on for a while, the chamber said.

The consensus estimate of survey respondents was that negotiations would last just over three months.

About 84 percent of survey participants said their company’s salary negotiations would end amicably, and 10 percent said the negotiations would require mediation from the labor committee. Six percent expected an agreement only after a strike or said they expected no agreement at all.

Employers also seem sanguine about the possibility of strikes called by the nation’s two major trade union confederations. The chamber’s report said strike calls won’t affect individual company negotiations with its workers because the federations’ actions “seem political.”

The survey said the biggest problems that could result in labor stoppages or other management-labor strife in the second half are negotiations over the peak wage system and labor market reforms, both being pushed by the government.


BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]

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