Korea’s real wages fall for fourth month as inflation outpaces pay

Real wages in Korea fell for a fourth straight month in July as pay increases failed to keep up with inflation, the longest losing streak since 2023.

The monthly average nominal wage per worker at businesses with at least one employee was 4.3 million won ($3,181) in July, up 104,000 won, or 2.5 percent, from a year earlier. The figures come from the Ministry of Employment and Labor's monthly labor survey of businesses, released Wednesday.

Consumer prices rose 2.8 percent over the same period. Adjusted for inflation, the real wage came to 3.6 million won, down 12,000 won, or 0.3 percent.

Prices, in other words, rose faster than nominal wages.

Real wages fell 1 percent in April, 1.4 percent in May, 0.1 percent in June and 0.3 percent in July.

Further price increases could put more downward pressure on real wages, a ministry official said. The official added that the decline could be partly offset if companies conclude wage deals or pay out more in performance bonuses.

The gap between employment types also showed in the figures. Regular workers earned 4.6 million won on average, up 151,000 won, or 3.4 percent, from a year earlier. However, temporary and daily workers earned 1.7 million won, down 46,000 won, or 2.6 percent.

Business size also made a difference. Workers at businesses with 300 or more regular employees earned 6.5 million won, up 209,000 won, or 3.3 percent. At smaller businesses, pay rose 64,000 won, or 1.7 percent, to 3.8 million won.

Workers put in an average of 161.9 hours in July, down seven hours, or 4.1 percent, from the same month a year earlier. Much of the drop was due to July having one fewer working day on the calendar than last July.

The number of people working at businesses with at least one employee stood at 20.69 million at the end of August, up 233,000, or 1.1 percent, from a year earlier. Regular workers increased by 92,000, or 0.5 percent, and temporary and daily workers by 141,000, or 7.4 percent.

Health and social welfare services led the increase, adding 122,000 workers, up 4.7 percent. Employment in professional, scientific and technical services rose 2.1 percent, and in finance and insurance 3.3 percent.

Workers also changed jobs more often. Job entries totaled 1,008,000 in August, up 154,000, or 18.1 percent, from a year earlier, while job exits rose by 147,000, or 16.5 percent, to 1,036,000.

By region, Gyeonggi added 49,000 workers and Seoul 42,000. Sejong posted the fastest growth at 3.1 percent, followed by Jeju at 2.7 percent and Incheon at 2.5 percent. Employment in Gangwon fell by 1 percent, while Busan and North Chungcheong grew by only 0.1 percent and 0.6 percent, respectively.

Regional data as of April showed wide pay gaps. Regular workers in Seoul earned the most, at 4.85 million won, followed by Ulsan at 4.55 million won, South Chungcheong at 4.42 million won and Gyeonggi at 4.31 million won. The national average was 4.29 million won.

Jeju had the lowest average at 3.41 million won, followed by North Jeolla at 3.52 million won and Gangwon at 3.56 million won.

Real wages rose the most in North Chungcheong, by 1.5 percent, followed by Jeju at 1.3 percent. They fell 7 percent in Ulsan and 5 percent in North Gyeongsang.

Regular workers in North Chungcheong put in the longest hours, at 177.4 hours, followed by South Chungcheong at 176 hours. Hours were relatively short in Gwangju at 167.1 hours and Daejeon at 168.2 hours.

The ministry attributed the longer hours in North and South Chungcheong to the large share of manufacturing industries there, and the shorter hours in Gwangju and Daejeon to the larger share of service industries.

BY JEONG JAE-HONG [[email protected]]