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Park’s salary to rise by 3 percent

The Cabinet has decided to raise President Park Geun-hye’s annual salary by more than 3 percent and expand the merit-based wage system in the public sector, the Ministry of Personnel Management announced Tuesday.

Park is set to earn 212 million won ($179,000) this year, compared to 205 million won last year, after the Cabinet approved the bill on government employees’ salaries in the meeting held in the morning.

Given that the nation’s average consumer price inflation stood at 0.7 percent last year, the Cabinet agreed to increase the salary of public servants nationwide by 3 percent. The salary is comprised of base wage, allowances and welfare benefits. 

President Park Geun-hye (Yonhap)
President Park Geun-hye (Yonhap)

Under the new pay rules, Prime Minister Hwang Kyo-ahn will receive 164 million won, up 3.4 percent from a year earlier. Cabinet ministers are set to earn 120 million won while vice ministers will receive 117 million won.

The government will also expand the merit-based wage system, which was partially applied to top ranks in the government, to lower-level officials as well as high-ranking officials in police and firefighting authorities starting this year.

Currently, Korean civil servants are paid in accordance with a seniority-based wage system, meaning that they get a pay raise in tandem with their seniority rather than their performance.

In the merit-based system, government officials rated SS in their performance evaluation -- awarded to the top 2 percent of performers in the government -- will receive 50 percent more in incentives than those in the next S class.

The scores put officials into five classes -- SS, S, A, B, C -- in decreasing order.  

Those in the SS class can take home an extra 10 million won this year, followed by S class (6.9 million won), A class (5 million won) and B class (3.4 million won). The officials given the lowest class, C, will not receive any incentive.

The move is seen as part of the government’s efforts to encourage civil servants amid public pension reforms. The National Assembly passed the embattled pension reform bill last May, which made government workers pay more in pension contributions to receive less in their payouts after retirement.

According to the ministry, the government also increased salaries for conscripted soldiers by 15 percent on-year in 2016 in a bid to improve their working conditions, with sergeants set to take home an extra 197,100 won a month.

The new rules also stipulate a raise in allowances for government workers who take higher risks to enhance public security -- such as members of special police unit, firefighters and soldiers on the frontlines.

Taking a closer look at President Park’s salary of $179,000, it is relatively higher compared to other world leaders, given South Korea’s per capita gross national income stood at $27,090 last year.

According to the data compiled by CNNMoney last year, Prime Minister Shinzo Abe of Japan received $202,700 a year while Xi Jinping of China, the world’s second largest economy, took home only $22,000. The per capita GNI of Japan last year was $42,000 and for China was $7,400, according to statistics from International Monetary Fund.

President Park earned six times the per capita GNI, while Abe and Xi respectively received five times and three times the per capita GNI of their countries.

President Barack Obama of the United States received an annual salary of $400,000, the highest income among world leaders. The country’s per capita GNI was $55,200 last year.

By Ock Hyun-ju (laeticia.ock@heraldcorp.com)

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