This study surveys the current paid wages of businesses of different sizes and industries, and analyzes the factors that determine the wage gaps based on the survey findings.
Wage gaps have become a hotly debated economic issue in Korea, recently. The paid wage gap between large corporations and smaller businesses widens yearly, reinforcing the gap between large corporations and smaller businesses.
In 1980, the average wage that an employee of a smaller business—one employing 10 to 29 people—amounted to 94.8 percent of the average wage that an employee of a large corporation—one employing 500 or more people—earned. This gap may appear minimal, but these figures are conflated with the gender effect: women tend to get paid less than men at both large and small businesses. If we confined our comparison to male employees only, the average wage a male employee earns at a smaller business amounts to 83 percent of his counterpart’s wage at a large corporation. Production workers at small businesses also get paid 25 percent less than their large-corporation counterparts, while men working in administration at small businesses—by far the lowest-paid group—earn only 63 percent of what their large-corporation counterparts earn.
Once we expand the scope of our analysis to the years from 1973 to 1980, and set the sum of all wages that people in administrative and managerial positions earned as a baseline, the average wage of a worker at a small business (hiring 29 people or fewer) amounted to only 55 percent of the baseline in 1975, while a worker at a larger business (hiring 100 people or more) earned 87 percent, and a worker at a large corporation (hiring 500 people or more) earned more than 100 percent of the baseline. As for production, the earnings figures were 76 percent, 88 percent, and over 100 percent, respectively, in 1975. As we compare these data from 1975 and 1980, we can see that the wage gap between large corporations and smaller businesses has consistently widened over the years.
The mean age group of male employees in 1980 was between 35 years old and 39, of an overall workforce from the 20s to over 50. A typical male employee with professional qualifications or in a managerial position and in the 35-39 age group earned KRW 421,400 at a smaller business, KRW 519,800 at a medium-sized business, and KRW 587,800 at a large corporation. A typical employee in a production job and in the same age group earned KRW 172,500, KRW 214,600, and KRW 222,400 at small, medium, and large businesses, respectively. Female employees, aged 18 to 44, had a mean age group of 25 to 29. A typical female employee in the 25-29 age group and working in production earned KRW 86,500, KRW 89,700, and KRW 106,500 at small, medium, and large businesses, respectively. This study reveals that sizable income gaps exist for workers of the same age group according to the job type, the industry type, and the size of the business.
기업규모별 임금격차분석(Analysis of wages gaps among businesses of different sizes)
|Journal Title; Vol./Issue||한국개발연구:vol. 3(no. 4)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Macroeconomics
Industry and Technology < Entrepreneurship
|Holding||KDI; KDI School|