The Korea Herald

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Temporary workers' wages dip for first time in 4 years in 2014: report

By KH디지털2

Published : March 1, 2015 - 14:08

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Wages of temporary workers dropped for the first time in four years in 2014, fueling worries that the country may be entering a period of economic growth and more employment without real income gains, observers said Sunday.

Data by the labor ministry showed inflation growth outpacing income gains of temporary workers last year. This effectively means negative growth in terms of wages.

Temporary workers, who are usually hired for less than a year, and belonging to firms with five or more employees, received a real average monthly wage of 1.27 million won (US$1,150) last year, down 0.5 percent on-year. The last time real wages for these workers fell was in 2010, when numbers contracted 4.4 percent.

The latest findings also showed the average real wages of all workers grew in the low 1 percent range in 2014, the lowest tallied in three years. All workers checked include both regular employees and those hired on a temporary basis.

Wages for all workers reached 2.92 million won, for a 1.3 percent gain. This is only better than 2011 when real wages actually declined 2.9 percent compared with the year before.

In 2012 real wages advanced 3.1 percent, but they fell to 2.5 percent in 2013 and again last year. The average wage for regular workers stood at 3.09 million won, a marginal gain of 1.1 percent on-year.

"The drop in wage growth is worrisome since South Korea's economy probably grew 3.3 percent last year, with the government announcing new job creation numbers reached a 12-year-high," a job market observer said.

Such data was confirmed by a separate report released by Statistics Korea that showed a two-person household earned 4.07 million won a month in 2014, a gain of 2.9 percent on-year. This marked the first time that income figures surpassed the 4 million mark, but the slowest growth reached since the minus 0.2 percent reported in 2009 right after the global financial crisis.

Related to the slow pace of growth, the statistical office said of the 533,000 jobs created last year, 82.4 percent, or 439,000, were positions filled by people over 50. Such jobs usually pay less than those given to younger people. The increase in 140,000 temporary jobs last year further affected real income gains.

Analysis of past data showed that real income growth had generally fallen below annual growth from 2009 onwards, with the only exception being in 2012.

During this period, real income growth was up 1.3 percent, while the national economy grew 3.3 percent.

The slow pace of income growth, meanwhile, can lead to a drop in spending that is detrimental to sustainable growth.

"There is an urgent need for the government to move from simply creating more jobs to creating quality jobs with good wages," Hyundai Research Institute senior researcher Kim Kwang-suk said.

He said by creating more regular jobs with good pay, the government can push up spending that can vitalize the economy. (Yonhap)