South Korean business lobby calls for wage growth to slow down

A continued growth in wage will weaken business competitiveness and lead to price hikes and inflation, claimed the Federation of Korean Industries.
By: | July 21, 2022

South Korea’s wages have risen excessively, which could weaken business competitiveness, said the Federation of Korean Industries (FKI). 

The average annual wage per employee of listed companies increased by 43.4% in the 10 years preceding 2021, it noted.

The average annual salary per worker jumped from 55.93 million won (US$42,600) in 2011 to 80.16 million won (US$61,179) in 2021, while listed firms’ revenue per employee rose from 960 million won (US$732,684)  to about 1.1 billion won (US$839,534) over the same period.

“Excessive wage hikes in proportion to productivity growth will not only pull down companies’ competitiveness but also incite product price hikes and lead to inflation,” said Choo Kwang-ho, chief of FKI’s economic research division, reports The Korea Herald

“For companies to survive and keep jobs amid uncertainties in the international and domestic business environment, steep wage hikes should be avoided, and labour and management should work together to raise productivity,” Choo said. 

READ: Over 50s make up 85% of job increases in South Korea

Industry-wise, travel agencies and travel service providers registered the highest growth of average wage divided by revenue, climbing by 10.1 percentage points, followed by film and broadcast producers and distributors, rising by 9.6 percentage points.