It turned out that the monthly pay of an office worker who joined a small or midsize company and worked for nearly five years was lower than that of a new hire at a large corporation. The wage gap among young people has widened over the past five years, and the difference in performance pay has grown even more. The analysis said the size of corporations has a greater impact on wage levels than gender or employment type.
Korea SMEs & Startups Institute (KOSI) released a report titled "Wage gap analysis between large corporations and small or midsize companies" on the 8th and stated accordingly. Based on the Ministry of Employment and Labor (MOEL)'s survey on working conditions by employment type, the report compared wage levels at corporations with 300 or more employees and corporations with fewer than 300 employees over 2020–2025.
As of 2025, the average monthly total pay for workers at small or midsize companies was 3,362,000 won, or 53.2% of large corporations (6,323,000 won). Even on an hourly basis, small or midsize companies were at 57.3% of large corporations. The smaller the workplace, the larger the gap. Monthly pay at business sites with four or fewer employees was 37.8% of large corporations, and business sites with 5–29 employees were just 53.8%.
The gap is getting worse. Compared with 2021, the share of monthly total pay at small or midsize companies relative to large corporations fell by 0.5 percentage points at business sites with four or fewer employees, 3.0 percentage points at those with 5–29 employees, and 2.8 percentage points at those with 30–299 employees. This is because the average annual wage increase rate was lower at small or midsize companies than at large corporations (4.0%).
Workers at small or midsize companies found it difficult to close the gap with large corporations even as they gained experience. As of 2025, the monthly total pay for workers with 3–5 years of service at small or midsize companies (3,334,000 won) was lower than that of workers with less than one year at large corporations (3,447,000 won).
It was the same for fixed pay: the monthly fixed pay of an employee with 3–5 years at a small or midsize company (2,998,000 won) did not reach that of a new hire at a large corporation (3,108,000 won).
The report pointed out that, beyond the issue of low wages for young people, there is simultaneously a "ladder-of-growth gap" in which the difference with large corporations widens with age. Setting the wage of small or midsize company workers in their 20s (29 or younger) at 100, those in their 50s at small or midsize companies were at 162, while those in their 50s at large corporations reached 325.
The monthly wage of small or midsize company workers aged 29 or younger was tallied at 56.4% of that of young workers at large corporations. This share fell 2.0 percentage points from 58.4% in 2020, meaning the wage gap among young people has widened over the past five years. That is because the average annual wage increase rate was lower for those aged 29 or younger at small or midsize companies (3.2%) than for those aged 29 or younger at large corporations (3.9%).
The report analyzed this as "a difference in approach, with large corporations focusing on securing top talent and small or midsize companies focusing on verifying whether talent adapts to the organization."
The performance pay gap was even more extreme. As of 2025, special pay (bonuses and performance pay) at small or midsize companies was 17.4% of that at large corporations. This is far lower than fixed pay (64.5%) and overtime pay (32.6%), and the report identified the performance pay gap as the biggest cause of the wage gap between large corporations and small or midsize companies. While special pay at small or midsize companies fell an average of 0.3% annually from 2022 to 2025, fixed pay rose an average of 2.6% over the same period.
The size of the gap was stark at the individual level as well. The average monthly special pay for workers in their 50s at large corporations was 20.35 times that of workers aged 29 or younger at small or midsize companies.
By years of service, it was even more severe: the average monthly special pay for workers with 20 or more years at large corporations was 337.81 times that of workers with less than one year at small or midsize companies. The structure in which performance pay rises explosively the longer one works at a large corporation is widening the gap.
The influence of corporate size in determining wage levels was also clear. On an hourly wage basis, male nonregular workers at large corporations (29,232 won) were paid more than male regular workers at small or midsize companies (28,041 won). Female nonregular workers at large corporations (23,082 won) also earned more than female regular workers at small or midsize companies (21,373 won).
The report said this suggests that corporate size has a greater impact on wage levels than gender and employment type.
The gender gap also appeared in tandem with corporate size in a complex way. Wages were highest in the order of men at large corporations, women at large corporations, men at small or midsize companies, and women at small or midsize companies. Among them, the hourly total pay of female nonregular workers at small or midsize companies was only 33.2% of that of male regular workers at large corporations. The disadvantages of corporate size, gender, and employment type overlapped.
However, on a monthly total pay basis, there was also a reversal by employment type. Regular workers at small or midsize companies (4,038,000 won) earned more than nonregular workers at large corporations (3,310,000 won), because the monthly working hours of regular workers at small or midsize companies (161.5 hours) were 21.5 hours longer than those of nonregular workers at large corporations (140.0 hours). Depending on whether the basis is time or month, the direction of the gap changes.
The institute cited a decline in innovation capacity at small or midsize companies as the background for the widening gap. The number of research institutes at small or midsize companies plunged from 42,525 in 2022 to 36,953 in 2025, and both research and development spending and the number of researchers have been falling since 2023. The number of business closures also increased from 867,000 in 2022 to 1,008,000 in 2024.
The institute proposed 10 key policy tasks to ease the gap, including expanding performance-sharing systems, strengthening AI utilization capabilities, and win-win cooperation between large corporations and small or midsize companies. In particular, it proposed as a new task the development of job-tailored AI training courses for incumbent workers at small or midsize companies and the operation of an "FDE support team" that dispatches on-site placement engineers.
It also emphasized that, as the wage gap is widening among young people and workers with less than five years of service, building a performance compensation system and incentives for long-term service is urgent.