Wage growth at 10-year low

Average wage growth crashed to a 10-year low as of March in a reflection of the worst ever economic conditions since the 1997-98 financial crisis, the Labor Ministry said yesterday.

According to an analysis of the data on 837 companies with more than 100 employees, in which their labor and management had concluded negotiating contracts, their average wage increase was 1.8 percent, sharply down from 5.5 percent in the same period last year, ministry officials said.

Wage growth was last in the red in 1999 when the figure came in at minus 0.3 percent. Then it rose to 7 percent in 2000, 5.4 percent in 2002, 4.1 percent in 2005 and 4.6 percent in 2007, according to ministry officials.

Businesses with the highest number of employees saw the lowest wage growth.

Average wage growth for firms with over 5,000 employees came in at 0.4 percent, while it grew to 1.9 percent for businesses with 500-5,000 employees, and to 2.6 percent for those with 300-500 workers. The growth rate for businesses with less than 300 workers, however, slipped to 2.3 percent.

It was also found that 350 firms, or 41.8 percent of those studied, either agreed to freeze or slash wages, said Kim Wang, director of the labor-management cooperation policy division at the ministry.

"This is more than a four-fold jump from 62 companies that vowed to take such actions around this period last year," he said.

Not only that, about 12.3 percent of the companies with more than 100 workers - 837 out of 6,781 - agreed on their wage levels for this year, completing the wage negotiation process at the fastest pace since 1997, said ministry officials. The rate remained at 6.2 percent in 1997, 9.1 percent in 1998, 9.4 percent in 1999 and 8.5 percent in 2008, officials added.

"We project the figure of businesses that freeze or slash wages to increase as the concept of burden-sharing between labor and management expands this year with the current financial breakdown," Kim said.

By Cho Ji-hyun



(sharon@heraldm.com)