An analysis has emerged indicating that the wage levels and increase rates of South Korea's large corporations are relatively high compared to Japan and the European Union (EU).
According to the 'International Comparison of Wage Levels by Company Size in Korea, Japan, and the EU' released by the Korea Enterprises Federation on the 16th, the total annual wage aggregates (excluding excess pay) for large corporations in South Korea was $87,130 based on purchasing power parity, placing it fifth among the 22 countries studied.
The criteria for large corporations define those in South Korea as having 500 or more employees, while those in Japan and the EU have 1,000 or more. Small and medium enterprises in South Korea and Japan have between 10 and 99 employees, while the EU has 10 to 49 employees.
This was 8.2% higher than the average of 20 EU countries ($80,536) and 52.9% higher than Japan ($56,987).
The wage level of large corporations relative to the gross domestic product (GDP) per capita in South Korea was 156.9%, showing an increase of 22.2 percentage points compared to the EU average (134.7%) and 36.1 percentage points compared to Japan (120.8%).
Among the 22 countries studied, this was the third highest, following Greece (166.7%) and France (160.6%).
South Korea experienced a high wage increase rate for large corporations, leading to a rapid widening of the gap between large and small-medium enterprises. The wages of large corporations in South Korea rose from 27.41 million won in 2002 to 70.61 million won in 2022, an increase of 157.6%, while EU large corporations experienced an increase of 84.7% during the same period, and Japanese large corporations saw a decrease of 6.8%.
When the wages of large corporations are set at 100, the wage level of small and medium enterprises is 57.7% in South Korea, 65.1% in the EU average, and 73.7% in Japan. In 2002, Japan was at 64.2%, South Korea at 70.4%, and the EU average at 76.6%.
The total annual wage aggregates for small and medium enterprises in South Korea was $50,317, ranking 10th among the 22 countries. This was 19.7% higher than Japan ($42,022) and 4.0% lower than the EU average ($52,398).
The wage level of small and medium enterprises relative to GDP per capita was similar in South Korea (90.6%), Japan (89.1%), and the EU average (87.6%). This ranked fifth among the 22 countries.
When the scope is widened to enterprises with 10 or more employees, South Korea's was $59,191, which is 13.6% lower than the EU average ($67,214) and 21.5% higher than Japan ($48,729).
Hwang Sang-woo, head of the economic research division at KEF, noted, "Wage increases unsupported by productivity cannot be sustainable; thus, we need to transition to a wage system based on job roles and performance."