Salary gaps have expanded over the past 5 years
Rich workers are indeed getting richer, and poorer workers are getting less rich.
According to a recent survey, the annual incomes of executive board members have risen 11 times more than those of rank-and-file employees over the last five years.
The JoongAng Ilbo and FnGuide conducted a survey on the annual salaries at listed companies for the last five years.
According to the results, rank-and-file employees last year earned 54.06 million won ($45,554) a year on average. That compares with 45.86 million won five years ago. The increase is 17.9 percent, about three times the total inflation over that time period.
The average annual salary for executive board members of the listed companies increased 55.3 percent from 169.37 million won to 263.06 million won over the same period.
While the salaries of average workers rose 8.2 million won, the salaries of high-level executives jumped 93.69 million won. The board level executives beat inflation by a factor of 8.6.
The gap between the annual incomes has expanded greatly, while higher-level employees are staying far ahead of rising costs.
The company with the greatest gap was CJ CheilJedang.
Executive board members received 4.18 billion won, while regular employees received 56 million won. Employees were only paid 1.3 percent of what higher-level executives were paid.
For every 1 million won earned by an executive board member, an employee was paid only 13,000 won.
At NCSoft, employees received 89.53 million won, while executive board members were paid 4.67 billion won. At Kolon Industries, normal salaries made up 2.1 percent of top-level salaries, and LG came in at 2.4 percent.
When it comes to types of business, companies in the automobile industry had the biggest disparities. For every 1 million won paid to a board member of an auto company, an employee only got 88,400 won. The rate is 8.8 percent. In the insurance business, the rate was 9.1 percent, and in the oil and gasoline business it was 9.9 percent.
Companies that sell automotive components have the biggest gap within the automotive sector. Global SM Tech, a component company, paid on average 19 million won. Among the 123 automotive component companies, 68 companies, or 55 percent of the whole, fell short of the 54.06 million won average annual income of listed companies.
Conglomerates did not necessarily offer largest annual incomes. KT is paid 26 million won, Hyosung ITX 26 million won; KT cs 27 million won; and CJ Freshway 27 million won. All the companies are in the list of top 30 companies in the country.
Well-known distribution companies also paid low salaries. MP group paid 20.06 million won, Seobu T&D and Square1 24.57 million won; and Youngone Holdings 25 million won.
Although the annual salaries of executive board members have risen rapidly, they are often quitting their jobs. Last year, board members on average served 4.67 years. Five years ago, they served 6.1 years. Other employees worked on average 7.6 years last year, up from 6.9 years five years ago.
The gap in annual incomes between holding companies and affiliated companies could be extremely large. Workers of Orion Holdings earned 402 million won, over nine times that earned by production workers at Orion - who were paid 44.59 million won on average - the subsidiary famous for Choco Pies.
AK Holdings’ annual income at 101 million won was twice than that of Aekyung, at 52 million won. S&T Holdings paid 104 million won, whereas S&T Dynamics paid 55.26 million won.
Experts say that these statistics should be carefully interpreted.
“As capitalism develops and becomes more sophisticated, the reward is highly likely to exponentially increase according to how rare one’s ability and jobs are,” said Woo Seok-jin, an economics professor at Myongji University.
“Even though executive board members’ annual salaries rose a lot, if the members had played a big role in making the company lucrative, the large gulf between the employees and board members should not be necessarily seen as something negative.”
BY MOON HEE-CHUL, OH WON-SEOK [firstname.lastname@example.org]