Wages improved overall in 2016

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Wages improved overall in 2016


The average annual salary of workers last year grew faster in the bottom tier of income earners than the top tier, and the gap between wages at conglomerates and small businesses narrowed, according to a report released Wednesday by the Korea Economic Research Institute, a local think tank, suggesting the country is making moderate advances toward wage parity.

Last year, the average worker made 33.9 million won ($29,700), up 3.3 percent from the previous year. Those in the top 10 percent made 95.9 million, while those in the bottom 10 percent made just 6.3 million won.

Still, the bottom 10 percent and bottom 20 percent each saw their annual salary grow 5.3 percent and 4.6 percent, respectively, compared to the previous year. They were higher than the overall average of 3.3 percent growth. The top 20 percent only saw their income grow 2.9 percent, while the top 10 percent saw their annual salary inch up 1.4 percent.

“Despite unfavorable conditions like global trade protectionism, a sluggish domestic market and corporate restructuring, the average salary of workers went gone up,” said Yoo Hwan-ik, head of the policy department at the Korea Economic Research Institute. “Especially those in the lower income bracket and those working at SMEs improved.”

Last year, workers at conglomerates earned an average 65.2 million won, while those working at small and medium-sized enterprises made an average 34.93 million won. The salary change at conglomerates was actually a 0.3 percent decline from the previous year, while workers at SMEs took home nearly 4 percent more than the year before.

As a result, the annual salary of SME employees is now equivalent to 53.6 percent of those at conglomerates. That’s a 2.2 percentage point improvement from 2015.

Last year, only 430,000 individuals made more than 100 million won, accounting for just 2.8 percent of all workers. Those that made between 80 million and 100 million won amounted to 470,000, or 3 percent, and those between 60 million and 80 million amounted to 1.07 million individuals, or 7 percent.

Those that made between 40 million and 60 million won amounted to 2.24 million people, or 14.5 percent. Income earners with 20 million to 40 million won accounted for the most, over six million people, or 39 percent. Those with less than 20 million won totaled 5.21 million, or 33.8 percent.

Overall, those who made less than 40 million won a year dropped from the previous year. They accounted for 72.8 percent, 1.4 percentage points smaller than the previous year.

The situation was similar for those who made less than 20 million won as their portion dropped 2.7 percentage points to 33.8 percent.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]

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