Wages for regular workers in South Korea rose about 131,000 won in the first half of this year from a year earlier, though most of the increase was concentrated in the electronics and telecommunications sector, which includes chipmakers such as Samsung Electronics (005930.KS) and SK hynix (000660.KS).
Monthly total pay averaged 4.318 million won per regular worker in the first half, up 3.1%, or 131,000 won, from a year earlier, according to a report on first-half wage increases by company size and industry released on Sept. 20 by the Korea Enterprises Federation. The pace of growth was 0.4 percentage points slower than the 3.5% recorded a year earlier.
Companies with 300 or more employees raised pay by 4.8%, while those with fewer than 300 employees raised it by 2.1%. Both groups slowed from the previous first half, when they posted 5.7% and 2.7%, respectively.
By pay component, growth in fixed wages such as base pay eased to 2.2% from 2.9% a year earlier, while special payments including performance bonuses accelerated to 9.3% from 8.1%. Special payments averaged 601,000 won a month in the first half, the highest on record.
The divergence was sharper at companies with 300 or more employees, where fixed wage growth slowed to 1.4% from 3.4% and special payment growth climbed to 14.7% from 12.8%. Special payments at those companies averaged 1.824 million won a month in the first half, up 234,000 won from a year earlier and the highest on record.
The electronics and telecommunications sector, which includes semiconductors, posted the steepest increase in total monthly pay. Average monthly pay in the sector reached 9.434 million won in the first half, up 23.1% from a year earlier. Special payments in the sector jumped 66.0%, dwarfing the 1.8% increase across all other industries. The sector accounts for just 2.4% of all regular workers, or about 377,000 people, but made up 32.4% of the overall wage increase.
Excluding electronics and telecommunications, average monthly pay across the remaining industries was 4.187 million won, up 2.2% over the same period.
"In the first half of this year, higher special payments in the electronics and telecommunications sector, driven by improved semiconductor earnings, had a considerable impact on overall wage growth," said Ha Sang-woo, a director at the Korea Enterprises Federation. "Companies should share their performance with workers, but they must set payment levels with future investment and mid- to long-term competitiveness in mind, and distribute them fairly based on organizational and individual performance and contribution."
Ha added: "We should be wary of demands for wage increases that exceed a company's ability to pay, based on the compensation offered by other high-performing firms. Companies and workers should raise productivity together and use that as a basis for expanding corporate competitiveness and the capacity to pay wages."
