Korea's wage level for college graduate new hires is higher than that of key competitors Japan and Taiwan, the Korea Enterprises Federation (KEF) said on the 1st.
According to a report released by KEF that day, titled "International comparison and implications of entry-level pay for college graduates in Korea, Japan and Taiwan," Korea's entry-level pay for college graduates was 24.5% higher than Japan's and 41.1% higher than Taiwan's based on purchasing power parity (PPP). The analysis drew on the 2024 Ministry of Employment and Labor (MOEL) survey on working conditions by employment type in Korea, Japan's Ministry of Health, Labor and Welfare basic survey on wage structure, and Taiwan's Ministry of Labor statistics on starting salaries. The report said that because statistical standards differ between Japan and Taiwan, each was analyzed against Korea's statistics.
A comparison of Korea and Japan showed the average entry-level pay for college graduates (first wage; annual wage aggregates excluding overtime pay) was $46,111 in Korea and $37,047 in Japan, making Korea 24.5% higher. In particular, among large companies, Korea (500 or more employees) was $55,161 and Japan (1,000 or more employees) was $39,039, a gap of 41.3%. The gap was 29.3% for medium-sized companies and 21.0% for small companies. In 9 of the 10 industries comparable between the two countries, Korea's entry-level pay for college graduates exceeded Japan's.
For Korea and Taiwan, the survey target was the annual wage aggregates (excluding special bonuses) of newly hired college graduates, based on enterprises with 5 or more employees in Korea and 1 or more in Taiwan. Korea's average entry-level pay for college graduates was $42,160, 41.1% higher than Taiwan's $29,877. In a comparison of non-small and medium-sized enterprises (100 or more employees), which are close to large companies, Korea was 37% higher than Taiwan. In all 17 comparable industries, Korea exceeded Taiwan, with large gaps in construction (161.0% of Taiwan) and professional, scientific and technical services (155.3%).
Meanwhile, based on the market exchange rate, Korea's entry-level pay for college graduates was $24,295, 91.2% higher than Taiwan's $12,706.
Ha Sang-woo, head of economic research at KEF, said, "We confirmed that entry-level pay for college graduates at large Korean companies is significantly higher than in Japan and Taiwan," adding, "In Korea, a pay system with strong seniority combines with high entry-level pay, and uniform, high-rate wage hike demands by unions are further entrenching a high-wage structure at large companies."
He added, "In this high-wage structure, extending the statutory retirement age of 65, which concentrates benefits mainly on large-company workers, can weaken youth employment and deepen the dual structure. Therefore, it should be reviewed cautiously after creating overall labor market conditions such as spreading a job- and performance-based pay system."